1951-04-17

PUBLIC ACCOUNTS


Mr. W. G. Weir (Poriage-Neepawa) moved:: That the name of Mr. Pearkes be substituted for that of Mr. Homuth on the standing committee on public accounts.
That the name of Mr. Decore be substituted for that of Mr. Welbourn on the standing committee on public accounts.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Mr. J. V/aison MacNaughl (Parliamentary Assistant to the Minister of Fisheries): Yesterday the hon. member for Queens (Mr. McLure) directed the following question to the department:
What is the quota to the United Kingdom on the shipment of lobsters for the year 1951? Is the quota based on cases or on dollar value?
Under the scheme of token shipments administered by the Department of Trade and Commerce, the 1951 quota for shipment of canned lobsters to the United Kingdom is fixed at forty per cent of the average annual value of exports of this commodity to the United Kingdom during the base period 1936, 1937 and 1938.
The 1951 quota amounts to $489,138.


[Stage Direction]
On the orders of the day:
M^. L. T. Slick (Trinily-Conceplion): I
should like to ask a question of the Secretary of State for External Affairs. Has he anything to add to the statement with regard to consultations on the Japanese peace treaty which he made in the house on April 2?
Hon. L. B. Pearson (Secretary of Stale for External Affairs):: I have only this to add, that we have received a draft treaty from the United States government, and we have made a careful study of it. The observations of the Canadian government with respect to it will be forwarded shortly to Washington.
I might also say at this time that there is a broad measure of agreement between our views and those of the United States government on the basic issues of the treaty. It is our expectation that after the views of the governments concerned have been submitted to the United States government there will be further consultation, with the object of concerting future procedure.


Mr. Graydon:: Is it the intention to have any kind of conference among the powers in connection with this matter?


Lester Bowles Pearson: It has not yet been decided whether the Japanese peace treaty will be signed at a formal conference, or will be signed separately by governments, with the Japanese government, as a result of negotiations among themselves.


Mr. Browne (St. John's West):: I should like to ask a supplementary question. In today's Ottawa Citizen there is a statement to the effect that the United Kingdom had submitted a draft treaty to the United States. Has that also been submitted to Canada, and can the minister say whether the government of Canada is in agreement with the terms of that draft treaty?


Lester Bowles Pearson: I understand that the comments of the United Kingdom government on the American draft have taken now the form of another draft treaty submitted by the United Kingdom government. That United Kingdom draft has been submitted to us, but I have not yet had an opportunity to see it. In fact I am not sure whether it has actually arrived in the department.


Gordon Graydon: The situation is full of drafts.


Mr. Green:: Is the question of a Pacific defence pact included in these discussions?


Lester Bowles Pearson: No, not in discussions of the Japanese peace treaty.



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
Right Hon. C. D. Howe (Minister of Defence Production):: Mr. Speaker, with reference to a question asked in the house by the hon. member for Vancouver East (Mr. Maclnnis), as reported at page 1988 of Hansard for April 13, I would say that representation has
2094	HOUSE OF
The Budget-Mr. J. A. Ross been received from the Sheet Metal Association of British Columbia by letter to myself dated April 9. A reply was sent on April 16 from the director of the small industries division, and a further letter on April 17 from the chief of the general purchasing branch. A meeting is being arranged between officials of the Department of Defence Production and representatives of the association.
However, it should be pointed out that the statement made by the Sheet Metal Association, and repeated in the house by the hon. member, that steel supplies have been cut off in the province of British Columbia and that there has been no defence production in that province, is completely erroneous. Steel suppliers in Canada are distributing steel in accordance with past purchases. This appears to be the fairest and most equitable method of distributing the supplies which are available after taking care of defence requirements. Particular attention is being given to keeping steel distributors in all parts of Canada supplied with their normal requirements.
It is not possible to furnish all the steel that purchasers would like to have, but some success is being achieved in furnishing steel that is required for essential construction and maintenance purposes.



THE BUDGET


[Stage Direction]
The house resumed, from Monday, April 16, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mr. J. A. Ross (Souris):: Mr. Speaker, last night at the adjournment I had been discussing the sales tax and the increase of 25 per cent as set forth in the budget proposals. I had pointed out that this has greatly added to the problem of higher living costs throughout the nation.
I had also quoted the Minister of Justice (Mr. Garson) when, as premier of Manitoba, he had pointed out to the federal government that it was the undue reliance upon indirect taxes on staples and articles of everyday use that so seriously curtailed the quantity of goods that could be purchased by families with low incomes. I had pointed out that, as a result of the proposed increase in the sales tax from 8 to 10 per cent, only yesterday the
(Mr. Howe.]

Imperial Oil Company had announced an increase in the prices of gasoline and diesel oil. This adds to the cost of production of farmers and others- throughout the nation. There have been continuing increases in their costs, and this is an added one resulting from the budget.
Just prior to the Easter recess there was announced a final settlement with respect to the five-year wheat pool and a supplementary vote making provision for the payment of $65 million to cover that settlement. This amounted to a settlement of approximately ten cents on the dollar of the loss taken by prairie wheat producers during the five-year wheat pool.
During the Easter recess the Minister of Justice addressed a series of meetings in Manitoba in which he attempted to explain the wheat situation, but he carefully avoided all reference to the increased costs of production with which those farmers are confronted and with which they were confronted during the term of the five-year pool. In that respect, Mr. Speaker, I should like to quote-


Mr. Speaker:: Order. I do not know whether the hon. member proposes to reopen the debate on the United Kingdom wheat agreement. I do not think that should be permitted on this occasion. We had a long debate on the subjeot when the Speaker was in the chair, and subsequently in the committee of the whole. Under those circumstances I do not think that debate can be revived at this time.


James Arthur Ross: Mr. Speaker, if you rule that the $65 million has no bearing on the present budget, then I am out of order.


Mr. Speaker:: That is my ruling-and not only with regard to the hon. member but with regard to all hon. members who may follow in the debate. I thought I should bring it to the attention of the house at this time.


Gordon Graydon: On a point of order, surely an hon. member has a right in the budget debate to discuss anything connected with the financial aspects of the government's program. I suggest he should not be debarred from discussing this important branch of the program.


Mr. Martin:: How could there be a point of order on that?


Gordon Graydon: You are not Mr. Speaker.


Mr. Speaker:: The hon. member for Peel is right to a certain extent. In the present instance, however, the matter in question has already been decided. If the discussion were

reopened now it would be a revival of a debate on a subject which has been decided in the present session. On that ground I would rule the discussion out of order.


James Arthur Ross: Mr. Speaker, I must certainly abide by your ruling, but the farmers do not consider the matter settled, by a long shot. I would just refer to the editorial page of the Winnipeg Free Press for March 30. Anyone who cares to read it will find it interesting material which will bring him up to date on the subject. However in view of your ruling I will not discuss the matter further.
According to the Economic Annalist of December 30, a study was made by officials of the Department of Agriculture of the costs that farmers are called upon- to bear. According to that survey, which was carried out in the Gilbert Plains and Sifton farming section of central Manitoba, it was found, as set out in this pamphlet, that a number of the farmers could not pay their expenses and support their families from the revenues derived from their farms. Those findings are referred to at pages 1708 to 1710 of Hansard for April 6, which reports the discussion of estimates of the Department of Agriculture.
There is another matter with respect to wheat that has not been decided as yet. It was taken up with the government after Easter. It has to do with the $48 million to the extent of which the farmers of western Canada subsidized the consumers of Canada when all the other controls were taken off for a period of years following the war.


Mr. Speaker:: Was not that question fully discussed when the amendment to the wheat board act was before the house? If my memory serves me correctly, there was an amendment to the effect that 25 cents per bushel should be paid to the wheat farmers, and in that 25-cent proposal was the question the hon. member proposes to discuss now. I do not think it would be in accordance with our practice to revive that question at this time.


James Arthur Ross: Again I must abide by your ruling, sir, but a delegation did interview the government after Easter on this very matter. It certainly has a bearing on the budget, but I shall abide by your ruling.
I assume I shall be in order in making some reference to the international wheat agreement and the bearing it has on the cost of living in Canada today. This international wheat agreement means that right now, in April, the wheat farmers of the prairies are subsidizing all the consumers of wheat bread in Canada to the extent of 36 cents per bushel of wheat. This international wheat
The Budget-Mr. J. A. Ross agreement is going to mean a loss of many more hundreds of millions of dollars to the wheat producers of the prairie provinces. This is something that has not yet been discussed in this house; it is a new angle. I think the government should have provided in that agreement an escalator clause for annual consideration or adjustment.


Mr. Speaker:: Was not that wheat agreement discussed earlier this session?


James Arthur Ross: Not to my knowledge.


Mr. Speaker:: I was under the impression that it was discussed.


Mr. Knowles:: Is Your Honour not confusing two different wheat agreements, namely, the United Kingdom wheat agreement, which had a duration of four years and which has ended, and the wider and now current international wheat agreement? They are two separate agreements. I submit that while there was a fairly full discussion about the settlement of the Canada-United Kingdom wheat agreement, which had a duration of four years, there has been no decision during this session with regard to the international wheat agreement. I do not agree with all the things the hon. member is saying, but I think he has the right to say them.


Mr. Speaker:: For the time being I shall not rule against the hon. member. It is for the house to decide whether or not this question has been discussed previously and settled.


Gordon Graydon: Do we take it from your ruling, sir, that you are outlawing the term "wheat" from the debates of this house?


Mr. Speaker:: Far from it. I am simply
ruling that, in accordance with the practice of this house, questions which have been decided cannot be brought up in future debates in the same session. In effect, you cannot refer to a debate which is closed.


Mr. Quelch:: There has been no amendment or resolution moved during this session with regard to the international wheat agreement. There has only been reference to it, but there has been no discussion based on a resolution or amendment.


Mr. Speaker:: Apparently no hon. member
takes the stand that the international wheat agreement has been discussed this session. If the international wheat agreement has not been discussed this session, then of course I cannot rule it out of order. If it has been discussed, I would rule it out of order. I shall go this far at the present time: a discussion on the subject of wheat which has been settled at this session would be out of order now.

The Budget-Mr. J. A. Ross


James Arthur Ross: My understanding is
that this matter has not been discussed at this session. At any rate I have practically made my point about the international wheat agreement. It was simply that it was going to cost the western wheat producers some hundreds of millions of dollars. I do not think there is any argument about that. I repeat that there should have been an escalator clause to provide for annual adjustment or consideration of the agreement. I repeat also that the western wheat farmers are subsidizing the consumers of bread in Canada by 36 cents per bushel.
I am reading from the Searle index, and I may be asked if I believe in it. I think their research man is one of the most efficient there is anywhere in Canada. While I am not concerned about the company he works for, or the Winnipeg grain exchange, I have known this gentleman for many years and no one has been able to contradict any of his findings.
I want to refer to the marketing of grain at North Portal. I have referred to this in other sessions, and to the fact that the United States farmer markets his grain on one side of the street while the Canadian farmer markets his on the other side. As of March 10 the United States farmer was receiving $2,234 cents per bushel for his grain net, while the Canadian farmer received $1,434, a difference of 80 cents per bushel.


Clarence Decatur Howe: What are the grades?


James Arthur Ross: It says on a comparative basis; I presume No. 1.


Clarence Decatur Howe: There is no No. 1 in that locality.


James Arthur Ross: That was the quotation
set out, for that day's market, and I do not think the minister will deny it.


Clarence Decatur Howe: The participation certificate goes with the quotation.


James Arthur Ross: If the minister wants to make a speech I will sit down.


Clarence Decatur Howe: I do not like to see you put phony figures on the record.


James Arthur Ross: There is a difference of 80 cents per bushel. I will be fair to the minister and to the people who are handling the wheat and say that there will be a further adjustment to the Canadian farmer, because that is the initial payment.


Clarence Decatur Howe: I am glad you put that in.


James Arthur Ross: I hope the minister will rise in his place and tell the nation through


this house that there will be a final settlement amounting to one-half of that 80 cents. But still there will be that great difference left.
Our class II wheat, No. 1 basis Fort William for export, is selling at $2.26J. The price under the international agreement, and also for the Canadian trade, is $1,904. That shows a difference of 36 cents, and- that is the amount by which the prairie farmer is subsidizing the consumers of Canada.
Somebody has asked why I do not refer to Australia. I do not know why the hon. member for Maple Creek (Mr. Studer) does not get up and make a speech on behalf of the farmers who sent him here. I shall refer to the price of wheat right here in Ontario, which I believe is a part of Canada, and where they are being paid $2.35 per bushel. There is a difference there of 91J cents between what the Ontario farmer receives and what the western farmer is paid under compulsory marketing by this government. The net to the western farmer is $1.43J.
So much for wheat, Mr. Speaker. We will see whose prophecies come true.


Mr. Ferrie:: Say something about rye.


James Arthur Ross: I could say a lot about rye. The hon. member for Mackenzie (Mr. Ferrie) says, "Say something about rye". I remember the Minister of Agriculture a few years ago telling the people of western Canada that they should not grow rye.


Mr. Gardiner:: No, no.


James Arthur Ross: I know that I started to grow rye and I am not unhappy about the circumstances at all. Normally rye sells for 80 per cent of the price of wheat. What is the price of rye today? It is $2.35 a bushel. There is your comparison on rye.


Gladstone Mansfield Ferrie: 


James Arthur Ross: I am not going to say anything more about wheat now, other than to repeat that on February 6, in the debate on the address in reply to the speech from the throne, I requested the appointment of a royal commission to inquire into the grading, marketing, transportation and storage of grain in Canada and abroad. On March 8 I repeated that request. The leader of the opposition (Mr. Drew) also requested that an impartial appraisal be made of the losses of the wheat farmers of Canada under the five-year pool. The handling of the 1950 grain crop has been very unsatisfactory so far, and this is the ninth month of the crop year. I repeat the request for the appointment of a royal commission. The cost of such an inquiry would be very much less than one bushel of

wheat per prairie farmer. If everything is in order, why should there be a refusal to appoint a royal grain inquiry commission? I can assure you, Mr. Speaker, there are many items I have not mentioned in the house so far this session that would be brought to light as not having been in the interests of the wheat producers of western Canada. Again I ask for the appointment of such a commission.
I ask that the proposal to increase the sales tax from 8 to 10 per cent be withdrawn by the Minister of Finance, because it distinctly adds to the burden of the cost of living in this country and to the cost of production, especially for the farmers. I ask also that when the special committee is appointed later to study amendments to the Dominion Elections Act, 1938, provision be made by amendment for the transferable vote. Our election act is antiquated, and should be brought up to date.
I should like to refer to the result of a Gallup poll published in the press on Saturday, April 14. The heading is: "Much Profiteering in Canada? Three-quarters think there is". I will not quote the article. It can be found in the Montreal Daily Star for April 14 and in other daily papers of that date throughout the nation. The result of the poll of average citizens throughout Canada is that 75 per cent believe there is undue profiteering at the present time.
I will certainly support the amendment moved by my colleague, the hon. member for Greenwood (Mr. Macdonnell). If you will permit me, sir, I shall read it at this time. It is to be found at page 2053 of Hansard, and is as follows:
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
"the proposals of the Minister of Finance are unsatisfactory because they will inevitably increase the cost of living for all and especially for those least able to bear it.
This house condemns in particular, as inflationary, the increase by 25 per cent of the general sales tax and is of the opinion that the increase is unnecessary and unwise.
This house further condemns the heavy increase in excise taxes on certain essential commodities and is of the opinion that much of the government's proposed huge increase in taxation is due to its own extravagance. "


An hon. Member:: You do not believe that.


James Arthur Ross: I continue:
"This house regrets the failure of the government to take effective steps to deal with profiteering."
Somebody says that I do not believe it. I wish I had time to enumerate the many instances of wasteful expenditure of money that should rightfully have been saved for the taxpayers.
The Budget-Mr. Cauchon (Translation):


Mr. Robert Cauchon (Beauharnois):: Mr. Speaker, during this tragic hour in the history of the world, when human rights are disregarded or flouted in so many different conflicts, it is pleasant to be living in a country such as ours. It is indeed pleasant to be living in Canada, this huge expanse where stout-hearted- people grow amidst security, because of an excellent administrative system that guarantees the highest degree of individual freedom as well as the full flowering of their activities, in their march towards progress, to which the unlimited resources of their country entitle them to aspire.
Canada is a great and beautiful land; it is truly a land privileged amongst all others, one towards which the economists say the eyes of the whole world are now turned.
I do not believe that I will mislead the hon. members of this house when I say that, in these modern times, Canada sets an example to the various countries of the world, as the stronghold of democratic liberties. Let us not forget that this remarkable fact, which goes unnoticed by none, never fails to stimulate the curiosity of foreigners, from the very moment they set foot upon our hospitable soil. We must admit, without fear of contradiction, that Canada is truly a privileged country and that, consequently, its citizens are entitled to consider themselves as particularly favoured by Providence.
It so happens that within this immense and extraordinary country which is this dearly beloved Canada of ours, there is a bit of land of which, as a member of this house, I am particularly fond. It has rightly claimed the better part of my being and thus fastened upon itself my constant and devoted attention. This constituency, Mr. Speaker, of which I am justly proud, to which I can promise my selfless support and sincere devotion, this constituency which is making such strides forward and shows such great promise of future greatness, whose present prosperity is beyond doubt and which is so remarkable from every point of view, this constituency whose picturesque vistas and truly great resources make it so attractive to tourists, this constituency which belongs to a province which was one of the earliest to join confederation and which borders, for the most part, on our majestic St. Lawrence is the constituency of Beauharnois which I am introducing to you today with feelings of sincere admiration.
As I said a moment ago, the constituency is prosperous in spite of depression periods

The Budget-Mr. Cauchon and many trying days. Perseverance has been rewarded by success. When Sir Wilfrid Laurier paid us a visit during his 1911 election campaign, at which time he won us over by the charm of his silver tongue, the great statesman was able to see that our district was in full activity and well on the way to success in the various fields of industry and trade. While travelling through the fertile countryside and the pleasant towns of Beauharnois county, he did not fail to show his just appreciation for the excellent work done by the farmers and the townsmen. But how surprised would have been the great and illustrious Liberal leader of 1911 if he could have accompanied our present leader in his triumphant tour of the same constituency in. 1949. The enormous and very real progress achieved would have surely held the attention of the great Laurier.
For, from that day on, our fellow citizens have followed, practically without a break, the ascending road to success and prosperity, which, according to Virgil, can best be attained through unremitting toil. That is why, Mr. Speaker, I repeat that I am really proud of the county I represent today, thanks to the confidence placed in me by my fellow citizens.
The people of Beauharnois constituency are peaceful and hard-working, true to their ancestral traditions. They have inherited the strength and valour characteristic of our forefathers, discoverers and pioneers of noble and pure stock. In different parts of the constituency, especially in the towns of Salaberry de Valleyfield and Beauharnois as well as in Chateauguay and many rural centres, there are people of different nationalities, French-Canadians and Anglo-Canadians, living and working side by side the whole year round in the most complete harmony. That feeling of brotherhood, which ensures good understanding and harmony between the two races, is really to be admired.
It is a well-known fact that our various ethnic groups live in the greatest harmony, showing the unity of their views in their daily relations. This fact constitutes an excellent and most important factor of success which makes life more interesting and more heartening and greatly increases the performance of all in striving towards a common ideal of comfort and prosperity. That is an outstanding example which I deem it my duty to mention in the house since it is in harmony with the great virtue


of charity, the main basis of the democratic ideal, a virtue which is so useful and so necessary today especially, to strengthen us in the face of present dangers. The harmony existing among the people of our riding deserves public recognition and should be brought to the attention of the entire nation since it constitutes such a powerful means of protecting the population from class struggles and of consolidating at the same time the entire social structure by upholding peace and security.
That union and cohesion of our people has brought quite wonderful results in our riding. Whenever there is a good purpose to be served in the matter of social welfare, such concerted effort becomes conspicuous and makes for the success of the various campaigns. In each case, our citizens have realized where their responsibilities lay and they have been equal to the task.
In due course, the city people as well as the farmers have shown that they knew something about business and that they were alive to their duties as Canadians, by answering generously to the call of their country at a time when all our forces had to be directed towards a common goal. Thus, our people have greatly contributed to making every loan drive a success, conscious as they were of the importance of such contribution for the safeguarding of our most sacred rights.
During the last war, as In the war of 19141918, the constituency of Beauharnois made a fine effort. A great number of recruits enlisted in His Majesty's armed forces. Various plants, on the other hand, worked on the production of war equipment and munitions. The same spirit of co-operation prevailed amongst related organizations such as civilian defence. All in all, worth finds and asserts itself. This is true of citizens of our constituency, whenever a generous effort, a helpful hand is required for a good cause.
In the constituency of Beauharnois there is a power plant noted not only in the district but throughout the country. It is an asset provided by the St. Lawrence river, the development of which is in the blueprint stage. It will contribute to the fuller use of the water power of this great river.
Mr. Speaker, I cannot resist the impulse to congratulate the Minister of Transport for the magnificent statement he has made on several

occasions in connection with the St. Lawrence seaway project.
The competence of the Minister of Transport is well known, but at the risk of offending his modesty, I must say that the brilliant outline he has made on several occasions of the St. Lawrence seaway project has brought much comfort to all those who have our country's development at heart.
The people of Beauharnois, Salaberry de Valleyfield and of the whole constituency are deeply interested in the seaway project because of the advantages which everyone, in his own sphere, would derive from this undertaking. Everyone favours and takes a keen interest in the vast project related to the deepening of our mighty St. Lawrence river.
The Beauharnois plant supplies power to an unlimited number of factories of every description. Beauharnois county has made a fine name for itself and is justly proud of the success achieved by a few of its sons in literature, fine arts, science and even sports. In the field of science, one of our citizens has gained recognition not only in Canada but abroad.
As regards social relations, employers and employees work in a spirit of co-operation and mutual understanding. In this connection, the workers have shown themselves well disposed; they are also very efficiently organized and enjoy, in this respect, every privilege granted by the established statutes. On the other hand, industrial leaders have shown a fine spirit of initiative where their employees' welfare is at stake. Undoubtedly, some claims are necessary and, at times, disputes did arise, but no regrettable incident has ever occurred and relations between salaried workers and industrial leaders were renewed on a harmonious basis. I have no doubt that these industrialists would be the first to press for the necessary measures if ever the government required of them a united effort for the common good. I am sure that the industrialists of Valleyfield, of Beauharnois and of other parts of my constituency would be the first to meet the wishes of the government in this respect.
(Text):
Now, Mr. Speaker, I wish to draw the attention of the house to a social problem which I encountered very frequently during my four years as mayor of the city of Valleyfield, and also while acting as director and vice-president of the union of municipalities for the province of Quebec. Until a few months ago this social problem was urgent, but because of recent international events
The Budget-Mr. Cauchon it has become for the moment less pressing. This problem is of concern to one of every three workers in Canada.
I am referring to all Canadian workers over forty, whose plight can be appreciated by even a cursory examination of the advertisements in any of our daily newspapers. In recent years it has been in the field of labour that the most severe economic losses have been suffered. Loss in the field of employment is always an obstacle which hinders progress toward other objectives. Thus it is important to solve first the problem of employment if we are to lead the way to a progressive economy. Both nationally and internationally, unemployment is a waste of productive resources. Indeed, when a section of labour is inactive, both production and revenue are lower than if there were employment for all.
Since the 1930's everyone who has the welfare of the workers at heart must be deeply concerned about the ever-increasing tendency to discriminate against those over forty-five. Except in skilled occupations the older worker who does not retain his employment is faced with much greater difficulty in finding new employment. This was proved during the depression, when the numbers of unemployed older workers increased. The war demand for labour of necessity did away with much of this discrimination. It also showed that the prejudice was not based upon the fact that the older worker did not do his work satisfactorily. Nevertheless, once the war was over the older worker in North America was found in greater numbers among the unemployed.
Some employers would have us believe that these workers are the inevitable victims of the machine age and the modern accent on youth. The entrance of ex-service personnel into the labour market has sometimes been used to justify or excuse such discrimination, which is often practised against veterans in that age group. Post-war demands all over Canada for manufactured goods and building materials were such that all workers were needed and should have been employed.
A moment ago I stated that the problem is an urgent one. In order to prove my assertion as to its gravity, one has only to consult the statistics issued by the officials of the national employment service. Vocational guidance and employment counselling are absolutely essential. This is not a mere expression of personal opinion; it is the considered opinion of those of the international labour office whose business it is to study the
2100	HOUSE OF
The Budget-Mr. Cauchon reports on unemployment from all over the world.
On page 89 of the book entitled "Action Against Unemployment," issued by the international labour office in Geneva for the year 1950, we find the following:
The main need of workers who lose their employment, apart from an income for themselves and their families to live on, is for technical assistance in finding alternative employment or the training or retraining required for re-employment. In present-day employment conditions it is too much to hope that individual workers will be able accurately to diagnose their own position and prospects and find their way, unaided, into the most suitable alternative employment available. Many of them, in fact the great majority, need access to vocational guidance or counselling services capable of helping them into suitable employment. The provision of such assistance is therefore an essential part of employment market action against unemployment.
The importance of guidance and counselling services for the unemployed was further recognized during the early part of the war when, despite labour shortage, the unemployed were not being absorbed as rapidly as had been expected. The process of re-absorbing ex-service personnel and war workers into peacetime economic life also gave new impetus to the development of guidance and counselling facilities. Finally, post-war full employment campaigns have included emphasis on such facilities as an integral part of action to ensure manpower distribution and redistribution contributing to the smooth and efficient working of the economy.
In 1949, the international labour conference, aware of the importance of these trends not only for promoting individual work satisfaction, but also for improving employment market organization, adopted the vocational guidance recommendation. This recommendation urges the rapid development of vocational guidance and employment counselling services and suggests standards to accelerate the development of these services along sound lines.
Our government was even quicker to recognize the situation, and in 1947 set up a counselling service in the city of Toronto. So successful has it been that Dr. Louis I. Dublin, vice-president of the Metropolitan Life Insurance Company, in an article appearing in the January 6 issue of Collier's- a United States publication-pointed to it as a method of coping with this problem which the United States is also attempting to solve. I quote:
Canada has already demonstrated what can be done along this line. Several years ago it found that almost half the men registered with the Ontario region of the national employment service were over forty-five, and that industry rarely offered openings for this group. So it set up in Toronto a free experimental vocational guidance service for older people.
_ Not only does a successful businessman like Dr. Louis I. Dublin approve such an attempt at organization, but we find the following on page 8 of the same international labour office book:
Experience has proved conclusively that the systematic organization of the employment market is an essential condition for the permanent control of the problem of unemployment.


The subsistence of those over forty-five is too vital to risk continual subjection to the hazard of negotiation. Again, in the same book at page 110 we find:
As unemployment increases, employer specifications with respect to age are tightened, and the percentage of older workers among job seekers rises. In a very loose labour market, older workers become over-represented among job seekers, and employers with a much larger reserve to choose from become increasingly reluctant to hire them.
An editorial in the Montreal Gazette of February 12 expresses similar views. The writer concludes that:
Canada as a nation will itself show signs of aging if it fails to adapt itself to the new problems that its aging population is creating. There will be a great need to revise old ways of thinking about age, so that the lengthening years of its workers may also provide for a lengthening usefulness in industry and business.
Reasons given by employers for their deliberate adoption of this policy of discrimination can be briefly stated as follows: (1) the high cost of group insurance premiums for older workers; (2) the high cost of company pension plans for older workers; (3) the older workers' inability to master quickly new industrial techniques; (4) the high accident rate among these older employees; (5) their lower output.
The first objection can be answered in a few words. One has only to compare the premium charged per thousand for workers at the age of twenty-five with that charged at forty. In one case the difference is as small as $1.58 per thousand.	,
What can be done to meet the second objection as to the cost of a company-sponsored pension plan? If pensions are computed, as they are in many cases, only according to the number of years employers and employees have jointly contributed, this objection does not hold. It has been shown that the older worker, desperately anxious for employment, may be willing to relinquish his right to participate in a company's pension plan. Why should he be obliged to give up his right to a degree of security when he is forced to retire? We must find a solution. It has also been suggested that the contributions of those employed for only a short period be remitted. The idea that we can continue to advance our civilization by insisting upon giving less and less for more and more is a dangerous illusion.
Inquiries which I have made in my constituency of those in charge of personnel in various industries would indicate that the facts do not support the contention that older workers are not adaptable. Their contribution during the war years is surely convincing proof of this. Their past experience should be of value to the employers, whose counselling services

could direct the older workers to tasks within their capacity. They need not be asked to learn entirely new techniques. Surely it is in the interests of efficiency to make use of the older workers' skill and experience. It is absolutely wrong to think that old age always impairs man's faculties. The greatest contributions in the fields of philosophy and culture have come from the minds of older men.
Accident cases in which compensation was paid prove that the high accident rates are in the twenty to twenty-four age group. The older worker is by nature more cautious, more deliberate, and more accident-conscious. If productivity declines as employers imply it does after the age of forty, how can they explain the fact that earnings on a piecework basis reach their peak between the age of fifty and fifty-five? When workers are asked to assume additional responsibility in any office, it is generally given to those whose age and experience enables them to handle ever increasing duties. These older employees probably have very heavy family commitments; they are less bored by routine; they are less likely to change their jobs, and are certainly likely to keep their minds on their work. All this contributes to high productivity.
Canada, like the United States, has become, gradually but inevitably, a nation of older workers. At present-and this percentage will increase with the advancement in preventive medicine-thirty-three and one-third per cent of Canada's workers are over forty-five. How could a rearmament program be carried on without them?
The only direct purchasing power is that of goods and services which are offered. Our economy needs their purchasing power; the country needs their contribution to its exchequer. The burden of taxation cannot be borne only by part of the population.
The young workers must, ini their own interest, support a policy of employment for all. They are separated by only a few years from that same category. Can they feel secure in an employment market which denies its oldsters the right to work and the self-respect which employment secures? This is their right in a democratic society.
Employers must remember that one of the most elementary desires of every human being is the preservation of his dignity. Is it not better for society or for a nation to provide work for its older members than to dole out a monthly pittance which degrades the dignity of the human being?
Employment and government must co-operate to solve the problem in the interests both
The Budget-Mr. Cauchon of industry and workers. Men are born with equal rights to work and to economic independence. Any worker who has to worry about losing his job because he has reached forty-five cannot produce as much as one who feels his job is secure. Nor can he feel free to seek a better job. One of our ideals expressed in the Atlantic charter is "freedom from want." Is want less distressing and intolerable in middle age than in youth? The movement to secure the social welfare of the workers carries in itself great hope but not only for those who benefit directly by it. Failure to obtain work because of this prejudice against workers of forty-five gives communism an opportunity to spread its ideology.
The very existence of democracy depends upon the active co-operation of labour, both now and in the future. If the situation is such that the labourer over forty-five is denied employment, democracy will surely suffer.
It is fortunate that the voters do not share employers' reluctance to trust those over forty-five with the nation's business. Who could bear to think of depriving the country of the accumulated wisdom represented on the government side of the house? Dare we mention the Senate?
Unquestionably work brings health, financial independence and happiness to all. It is essential to the welfare of mankind.
Those who think that this social problem is of concern only to labour and industry are not facing reality. It is a most urgent one, the solution of which will restore to the labourer his reason for living and his joy in working.
This is the situation as I see it. The Department of Labour has done everything in its power to win the co-operation of industry in solving this problem. It produced a film called "Date of Birth" which was shown throughout Canada by the unemployment offices of the country. Unfortunately industry's response was disappointing, and the situation has not improved appreciably. However, I am glad to know that the effort was not entirely wasted. Mr. George K. Foster, vice-president of the Canadian Johns-Manville Company, Limited!, in an address to the Royal Canadian Institute in Toronto on January 29, is reported by the Montreal Star of that date as follows:
Modern management is not just cold industrial efficiency. Modem managers are equally concerned with industry's human relations, with the dignity of man and with the harmonious co-ordination of men and machines.
2102	HOUSE OF
The Budget-Mr. Cauchon
This view is expressed not only by the vicepresident of a big company such as Johns-Manville, but also by a man who represents the boards of trade and chambers of commerce of all Canada. Mr. F. G. Winspear, president of the Canadian Chamber of Commerce, in an article appearing in the "Monetary Times Annual National Review, 1951" and entitled "A fine new national spirit necessary in Canada," makes this statement:
As we move further Into this period of deepening crisis, I believe that Canadian business is ready and alert to assume its leadership which the country has the right to expect of it.
Also:
I believe attention should be directed toward the emergence of a fine new national spirit, the sense of enlightened leadership on the part of the business men of Canada.
Though it may be argued that we may be facing a shortage of manpower or a period of employment for all, and that this matter does not at present require immediate action, I am not in agreement with this point of view. In support of my contention, let me refer you to a report that was presented by the division director of the Department of Labour, division of research and statistics, at a public hearing of the New York state joint legislative committee on:	"Problems of the aging,"
December 9, 1948. This is a conclusion reached after a thorough study of the situation, and I quote:
As a group, however, the older workers are set apart by employment obstacles which leave them vulnerable to economic changes and with inferior status in the labour market even in periods of high employment.
Delegates to a conference on the problems of the aging, under the chairmanship of Dr. Albert Abrams, agreed that:
There are no insuperable obstacles to employment of older persons once management, labour and government sit down together to do the job.
I would propose that the federal government set an example to industry by employing in the civil service qualified older workers. These positions are suitable, for they require qualities which such workers generally possess-patience, judgment and experience rather than great physical strength.
The ability to work without the chance to do so means nothing unless we provide the opportunities.
According to a pamphlet put out by the institute of labour and industrial relations in connection with the university of Illinois and entitled "Who is too old to work?" we find on page 19, the statement:
Much of the success in making job opportunities for older workers will depend upon research findings.


As reported on page 70 of Hansard, the Minister of Labour (Mr. Gregg) made a statement as to the establishment of a national advisory council to make a survey of the manpower resources of the country. Would it not be desirable to instruct this advisory council to study at the same time this problem of older workers, in order to save these workers from suffering in a similar situation after the present emergency is over?
Perhaps even better would be the appointment of a special committee of the house to investigate fully means of making and finding job opportunities for older workers.


Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I wish at this time to direct my remarks to the speech delivered the other evening, by the Minister of Finance (Mr. Abbott), to deal with certain aspects of his budget speech and taxation proposals, and to refer in particular to certain paragraphs in his statement wherein he informs parliament and the country that the allocations for certain construction projects under the Department of Agriculture, the Department of Public Works and the Department of Resources and Development are to be curtailed, as part of the government's economy program.
I listened last night with a good deal of interest to the speech delivered by the hon. member for Regina City (Mr. McCusker). May I compliment him at this time upon his able presentation of the immediate need for the construction of a dam across the South Saskatchewan river in order to obtain irrigation and power development.
One of the main questions in my view is whether the budget is truly anti-inflationary, in the sense that it will prevent a further serious increase in prices, and whether or not the taxation proposals covered by the budget protect the low income groups within our nation. Of course the budget has to cover expenditures for the defence program. It is true that 10 per cent of the production of the country at this time must be used in the defence effort. But while the defence program is a real cost and burden upon the masses of the Canadian people, one group or one section in our economy has already benefited immeasurably by the present state of affairs in the world and the incident in Korea. I refer to corporations, and the profits of corporations after the payment of all taxes.
Corporation profits after taxes in 1949 were $1,171 million. In 1950 they had increased by $231 million to a total of $1,402 million, after the payment of taxes. Corporation profits from 1949 to 1950, after taxes, went up by 19-7 per cent, whereas the incomes of salaried

persons and workers in Canada increased in the same period by only 6-4 per cent. In the same period net agricultural income decreased from $1,513 million in 1949 to $1,424 million in 1950, a decrease of 5-9 per cent.
So this is the situation we have in 1950 compared with 1949: Corporation net profits, after taxes, are up 19 per cent, while salaried workers and labourers had an increase in their wages of less than one-third of that amount, or about 6 per cent. Then, the net income for farmers in Canada decreased within that period by approximately 6 per cent.
I say it is certain from those figures that neither workers' wages nor farm prices have contributed in the main to the inflationary spiral. Inflationary prices have been brought about mainly by corporations, monopolies, and semi-monopolies making increases in prices which were wholly unwarranted, and the result of which has been an increase in net profits, after taxes, in 1950, as compared with 1949, of over 19 per cent.
We have the minister's proposal of a surcharge or a surtax of 20 per cent on corporation profits, resulting in most instances in an increase in corporation taxes of 7 * 6 per cent. Does it follow from that proposal that corporation net profits in 1951 are going to be less than corporation net profits in 1950? I do not think it follows at all. Without price controls the great corporations of Canada are free to set the prices for their products. It will not be hard for companies like Massey-Harris, for example, to add on to their retail selling prices of machinery sufficient to pay the 7-6 per cent increase in corporation taxes, and sufficient to increase their 1951 net profits, after taxes, to a point higher than 1950 profits.
I say that without price controls the 7-6 per cent increase in corporation taxes, taken alone, can result only in one thing, and that is higher prices' and further inflation. The other proposals of the Minister of Finance do not improve-indeed they do not maintain the present standard of living of the lowest income group in our country. In arguing the advantages of a sales tax the minister said: Oh well, persons in low income groups have to pay the increased tax on only 25 per cent of their expenditures, and persons in the middle income groups from *$3,000 to $7,000 will pay the increased sales tax on only a third of their expenditures. Then he admitted that the incidence of the sales tax will decrease after the $7,000 income bracket.
The present increase in the sales tax is a regressive tax. It means a redistribution 80709-135
The Budget-Mr. Argue of purchasing power by taking it away from the lowest income groups in the country. When the minister came to increasing the tax on incomes he did not bring in a progressive increase by varying the percentage. Instead of doing that he placed on a surtax.


Mr. Sinclair:: Work it out.


Hazen Robert Argue: He placed on a surcharge of 20 per cent all across the board which, in my opinion, in no way compensates those in the low income groups for the increase in the sales tax and in no way compensates for the inflationary increase in prices that has taken place over the last few years.
The end result of all the tax proposals advanced by the Minister of Finance will be a further relative increase in the burden on the low income group. The minister increased the income tax on single persons earning $1,500 or less and on married persons earning $3,000 or less. We in this group do not approve of that part of the increase in the income tax. It has been said already a number of times by ministers of the government that 10 per cent of the production of Canada must be used in our defence program.
Let us look at the contribution already made by the married person earning $2,500 quite apart from the new burdens being placed upon him by this budget. If one compares the cost of living in 1949 with the last figure which was available on March 1 he will see that the purchasing power of a person earning $2,500 has gone down $263. In other words the effective buying power of people in that income group has been decreased already by more than 10 per cent. I think a further increase in income taxes on that group at this time is entirely unwarranted. There has been a reduction in purchasing power of $263; the Minister of Finance (Mr. Abbott) adds a further increase in the income tax for this year of $15 and for a full year of $30; and there is also the increase in the sales tax.
The low income groups in this country have no means by which they can pass on their income tax to someone else. By charging higher prices corporations can pass on all of the increase in the corporation tax. People in the low income groups, those on old age pensions, those with large families are the people that should be protected by this budget, but they are the people whom this budget has failed to protect. They are the people upon whom this budget forces an even lower standard of living.
There is nothing in this budget to encourage people to save. If a person bought a $1,000 bond in 1945 he finds today that his $1,000 is worth only $665. There is no

The Budget-Mr. Argue incentive in this budget for Canadians to save. As a result of this budget prices can only go higher. As a result of this budget a further penalty is placed on savings. To that extent this budget is certainly an inflationary budget.
Over the last number of years this government has brought in some excellent social security measures. While some of them did not go as far as we in this group would have liked to have them go, nevertheless this government sponsored and enacted many important social security measures. For example, on April 1, 1949, a couple of months before an election-that may or may not have had something to do with it-the government increased its share of old age pensions so that old age pensioners might be paid $40 per month. Two years after that date the government by its inflationary method of finance and its failure to impose price controls took back $3.43 per month from the old age pensioners. The purchasing power of that $40 is today only $36.57.
The late W. L. Mackenzie King took to himself and to his government, and rightly so, a great deal of credit for the family allowance legislation which came into effect on July 1, 1945. Those payments were intended to make a redistribution of purchasing power within Canada whereby those in the higher income brackets had some of their purchasing power transferred to those in the lower income brackets who had large families. I think the family allowance legislation was excellent, but the money that was paid to mothers in 1945 should have had some protection from this government. The government should not have allowed inflation to the extent that the $5 cheque is worth only $3.32 today, while the $8 cheque for older children is worth only $5.32 today.
For the last few years, and particularly last year, this government has allowed a redistribution of purchasing power by permitting a further lowering of the standard of living of those in the lower income groups. The weak in Canada, the old age pensioners, those who must depend to a considerable degree on the family allowance cheques, and persons on pensions of various kinds are in no position to protect themselves against inflation, are in no position to pass on the increased burdens of this budget. But the strong, those who are well organized in labour unions, are able to get increases in wages which to some extent may compensate them for the present inflationary prices. The great corporations of Canada which made more profit in 1950 than in 1949 are in position to load their increased corporation tax on the backs of the Canadian people. It

is time that this government brought down a budget which would stop inflationary prices and protect the living standards of the ordinary Canadian people.
I wish now to refer for a moment to the South Saskatchewan river project. In every election for almost twenty years the prospects of the building of this dam with its consequent irrigation and power developments have been held before the people of Saskatchewan by the Liberal party. As a matter of fact every political party has supported this development. In 1947 an article appeared in the Saskatoon Star-Phoenix, which article was quoted on a previous occasion in this house by the hon. member for Lake Centre (Mr. Diefenbaker). This article read in part:
It will be two years before construction work can begin on the South Saskatchewan river dam.
That the South Saskatchewan project will be carried out, let no one doubt. Mr. Gardiner has committed the present government to the undertaking, according to a report of his speech at Lethbridge the other day.
It was to be two years from that date before construction could begin on that great project. That brings us to 1949. In the election campaign of that year the Minister of Agriculture (Mr. Gardiner) made many statements with relation to the advantages of the South Saskatchewan development project. He called upon the people of Saskatchewan to send to Ottawa an increased number of members of the Liberal party to sit with the government, and he said: By doing so you will ensure that the dam will be built. I should like to quote from the Regina Leader-Post of June 23, 1949, the report of a speech made by the minister at Lemberg. It reads as follows:
"The South Saskatchewan project would provide cheap power and encourage building of industries in small towns, provide an incentive for young people to stay in this province. I think we have made a fairly good start now," said Mr. Gardiner. "Send us back to complete the job . . ."
They sent the Minister of Agriculture back to complete the job, and within a few months after the election during the first session in the fall of 1949 the minister said: Well now, the completion of this project will depend upon the province of Saskatchewan paying large sums of money towards its final completion. He even said at one point that he might hold a gun at the head of the government of Saskatchewan to the point where he would ask them to pay 50 per cent of the cost. As I understand the situation, the Saskatchewan government has now agreed to pay the share the Minister of Agriculture has said would be equitable. But even though Saskatchewan has agreed, the Minister of Finance in his budget speech has

apparently scuttled any prospects for the building of this very necessary project. The Minister of Finance has this to say at page 1801 of Hansard:
We have paid particular regard to our expenditures on construction . . . Examination of the estimates for the Department of . . . Agriculture reveals very large reductions in their construction programs, notwithstanding urgent needs for expenditure of this kind, following twenty years during which works have been postponed, first for lack of funds, then for war, and finally, in recent years because of shortages of materials and labour.
There never was any lack of funds. In the depression days the government should have found the money, as it well could have, to build this project. The people of Saskatchewan did not complain when it was postponed during the war, but we have never admitted that there was such a severe shortage of materials and labour following the war that a start on the project could not have been made. Now we have the defence program taking, as the Minister of Finance says, only 10 per cent of the production of Canada, and the Minister of Finance has apparently squelched any chance there was of getting the South Saskatchewan development project started and finally completed.
I want to say to the Minister of Agriculture that, even though we in the west feel that he failed to obtain a satisfactory settlement from the government with respect to the five-year wheat pool, we do not want him to fail to obtain this very necessary project. I say to the Minister of Agriculture that if he cannot secure approval for the project from the government he should dissociate himself from the government and leave it. The project is so important to the welfare and rehabilitation of the province of Saskatchewan that at this stage the Minister of Agriculture should dissociate himself from his colleagues in the cabinet if he fails to have the project approved.


Stanley Howard Knowles: Apparently he is not one of the big three after all.


Hazen Robert Argue: Apparently not. The province of Saskatchewan has agreed to pay even its increased share of the moneys for this project, a share which the Minister of Agriculture did not spell out until after the election. In a letter to the Minister of Agriculture on February 10 the premier of Saskatchewan said that, if the federal government would agree to the proposal of the Minister of Agriculture, namely, that the federal government pay $68 million and the provincial government pay $33 million, the Saskatchewan government stands prepared to proceed immediately this year with the construction of the project. The Minister of Agriculture can no longer say that the Saskatchewan government is in any 80709-135*
The Budget-Mr. Argue way responsible for the project not being started at this time. Whether we get the South Saskatchewan development project, with the possibility thereafter of irrigating 750,000 acres of land and developing 400 million kilowatt hours of electricity, depends directly on a decision of the federal government.
The estimates that might be used for this project have been decreased from a total of $2,770,000 to $2,045,000. It is clear from the estimates, together with the statement of the Minister of Finance, that the government has no intention in the world of building the dam in order to provide irrigation in south Saskatchewan at this or any other time. They have delayed the project from one time to another. They have found one excuse after another, and apparently they have found an additional excuse at the present time.


An hon. Member:: They are waiting for the next election.


Hazen Robert Argue: They will trot out the same old carrot on the stick in two or three years' time when the next election rolls around.


Stanley Howard Knowles: The same dam.


Hazen Robert Argue: I think we should view the project, Mr. Speaker, in the light of its actual cost to the government with relation to our defence program. I support the defence program. Nevertheless I believe that it is possible to construct the dam without in any way detracting from our defence program. In the-estimates this year for the Department of National Defence our defence expenditures amount to $1,600 million. The total cost of this project is $68 million for the federal^ government, not to be spent all in one year' but spread over ten years, or a cost to the federal government of less than $7 million a year, a cost of less than one-half of one per cent of our present defence program. If the government wished, certainly it would be possible to proceed with the construction of the project at this time.
I have always believed that the building of more tanks, guns, planes and ships is only one aspect of our defence program. Coupled with that there should be economic aid to the underdeveloped countries. According to this morning's press, 40 million people in India face starvation. As our share in the Colombo plan the government has earmarked $25 million. The government of India turned down the suggestion that part of the $25 million should be spent on the purchase of feed wheat from Canada. I do not blame India for thinking she might spend the $25 million to her advantage in some other way. But I say that the government should offer 100 million bushels of wheat as a gift to India, and other

The Budget-Mr. Fleming backward nations in need of food, without any strings attached and apart altogether from the Colombo plan.
If we are to protect democracy in the world, and if we are to spread democracy to other nations, one of the things we must do, and soon, is provide food to the starving peoples of the world. We must help the backward and underdeveloped countries. If the government would go ahead with the irrigation project on the South Saskatchewan river we could greatly increase our production of foodstuffs. I believe $7 million a year spent on the construction of that project would be as valuable to Canada by way of providing for defence as any $7 million of the $1,600 million in the estimates for national defence. If we are to protect democracy we must see that the underdeveloped countries have technical assistance and that the starving peoples of the world are adequately fed. If we do that we can help protect ourselves against the inroads of communism; and as a part of our defence effort I suggest that the government immediately [DOT]embark upon the development of the South ."Saskatchewan river.


Mr. Donald M. Fleming (Eglinion):: Mr. Speaker, the remarks I propose to offer this afternoon will relate directly to the budget, both the proposals submitted by the Minister of Finance (Mr. Abbott) and the speech which accompanied them. The bare, hard facts of this budget are these, in a word. This year the government is proposing to take out of the pockets of the people $3,730 million; to spend $3,700 million, and at the end of the year have a surplus of $30 million. Of that total contemplated expenditure of $3,730 million we are told that defence will cost $1,664 million and the non-defence expenditures and supplementary estimates will account for the balance of $2,036 million.
The minister reported that in the year just closed he extracted from the pockets of the people $3,105 million; that he expended $2,902 million, and had a budgetary surplus of $203 million. In order to achieve his goal this year and take from the people $3,730 million he proposes now to apply new taxes and increased taxes which will yield revenues not of $3,730 million per year but of $3,900 million. Just two years ago, on the eve of the election of 1949, the minister was at great pains to see that the estimates then introduced should not amount to a sum as large as $2,000 million. Therefore the estimates for that year were conveniently put just a fraction below that figure, at $1,985 million, so that with characteristic windowdressing on the eve of the election the government might say it was not going to take

an amount as large as $2,000 million out of the pockets of the people. Now this same minister expresses the fear of budgets of $4,000 million a year. What a change!
Let us measure the objectives of the Minister of Finance as disclosed in his budget speech. What has he sought to accomplish in the budget he has introduced? Well, we know what he is seeking to raise by way of revenue, and we have heard what he proposes to spend. What are the objectives he holds before parliament and the people in asking support for these estimates of revenue and expenditure? He has announced his objectives in these terms: "the pursuit of peace and the control of inflation." Let us then measure the proposals in the light of those announced or professed objectives.
As far as the pursuit of peace is concerned, I am sure there will be no haggling in this house about any necessary expenditures on national defence, as long as this house can be sure the taxpayers of the country will receive value for the money so spent. We will have to acknowledge that as the machinery of parliament is now constituted there is little effective opportunity for a parliamentary check on these vast expenditures on national defence; and, far from assisting parliament in devising new and improved procedures for checking these expenditures, the government has taken a sort of gleeful pleasure in defeating any constructive proposals put forward to that end. Apparently they do not want any assistance from parliament in surveying the expenditures they propose.
Then let us look at the other announced objective of the Minister of Finance, the [DOT]control of inflation. Would that this budget might accomplish this end! Would that it could make some effective contribution toward combating the forces of inflation! It is evident that the government is not sufficiently aware of what those forces of inflation are doing to the budget of the average Canadian family. If you want a good measure of the extent of inflation, Mr. Speaker, I suggest that you turn to page 6 of the white paper tabled by the Minister of Finance, where you will find the figures on the gross national product taken first at market prices and then in terms of constant dollars on the 1935-39 basis. This will show that a good deal of the so-called "buoyant revenues" and a good deal of the so-called prosperity of the country have been simply a fiction of figures and a measure of the elasticity of the Canadian dollar.
In 1939 the gross national product, measured in those two ways, was almost equal in value. At market prices it was

$5,598 million and in constant dollars it was $5,523 million. Then we come forward to 1946. In that year the gross national product at market prices was $12,008 million, while in constant dollars it was only $8,902 million. In 1949 the gross national product at market prices was $16,382 million, while in terms of the constant dollar it was only $9,648 million. On the preliminary 1950 figures we are told that the gross national product at market prices was $18,000 million in round figures, but in constant dollars only $9,982 million, or barely more than half. That is the gross national product to which the government is wont to refer in glowing terms when trying to picture the present situation.
The minister has said he wants to balance his budget. I do not think a single member of this house will have any disagreement with that professed objective. We all wish to see this budget balanced this year; but we do not wish to see the minister building up big surpluses at a time when the cost of living is pressing with an ever-increasing, intolerable weight upon the average Canadian family. There was a time when the Minister of Finance (Mr. Abbott) talked in the terms that are used by those who believe in the theory of the managed economy, and when, under the same guidance, he apparently believed it was his function to siphon off purchasing power by budgeting for a surplus. We saw that in the way in which he resisted the legitimate demands for decreases in personal taxation. In presenting this budget he has not used the jargon of those who believe in the managed economy, but one can sense the presence of that theory pervading the speech.
Now, that leads me to make an observation on budget surpluses and accurate budgeting. I submit, sir, that the first duty of a minister of finance in submitting a budget is to give the house a true estimate, and as accurate an estimate as can possibly be devised, of the expected revenues accruing from the various fields of taxation. There must be no covering up. We will not expect any superhuman ingenuity in estimating revenue, but we will expect that there will be no attempt at covering up, either of fact or of theory. I am not suggesting that there has been any deliberate covering up here of a budgetary surplus- in the figures the minister has put before us, but I do say that the best that can be said for the figures put before us in this budget, having regard to the record of these past five years, is that this budget, like its predecessors, contains the vice of inaccurate budgeting. In presenting this budget the Minister of Finance has been guilty, as in the past, of a chronic underestimation of revenues.
The Budget-Mr. Fleming With possibly one exception, sir, that has had a very misleading effect upon all budget debates in the last five years.
Inaccurate budgeting, sir, not only has a misleading effect on the house in leading the house into the approval of rates of taxation which are not justified to meet the legitimate expenses of government, but it also has a very harmful effect upon those who are charged with the management of the nation's finances. With budgetary surpluses rolling up during the year the inevitable effect upon the minister and his colleagues in the government, who are so often looking for opportunities of spending more money, is to create a loose attitude on their part towards expenditures. We have seen many examples of it.
When we are talking about budgetary surpluses, let us come down to the hard facts, and acknowledge that these budgetary surpluses do not reflect any credit on the Minister of Finance. They simply establish the fact that he has taken more money out of the pockets of the people, in most cases hard-earned money, than has been required to meet the legitimate expenses of government. If you want evidence, sir, of the loose budgeting that has occurred during recent years, let me give you some figures. These figures I am giving now are for the fiscal years ending on March 31, of the year I shall mention. In 1947, the minister budgeted for a deficit of $260 million. At the end of the year he turned up with a surplus of $374 million. He was just out $634 million in his calculations. In 1948 he budgeted for a surplus of $350 million. He turned up at the end of the year with a surplus of $676 million. In other words, he was out $326 million in his calculations. In 1949 he budgeted for a surplus of $549 million. He turned up with an actual surplus at the end of the year of $595 million. That year he was out $46 million. Then 1950, that is the fiscal year ending March 31, 1950, reflects the largess of this government on the eve of election. According to the previous pattern of budgetary surpluses the Minister of Finance budgeted for $202 million, which at the end of the year proved to be $131 million. He was out $71 million that year. You will notice that in that year the error is in the other direction, for this time he underestimated. Those of us who recall the way in which the government, during the election campaign in 1949, used public money to create good will for the government to serve its partisan purposes, will not have to look very far for an explanation of the budgeting error revealed in those figures.
In this year just closed on March 31, 1951, the Minister of Finance, even after he had an opportunity last September to revise his

The Budget-Mr. Fleming budget estimates, announced an estimated surplus of $20 million. He turned up at the end of this year with a surplus of $203 million. Let me remind you, sir, that was after having provided $65 million of expenditure of an extraordinary nature recently that was no part of the original budget. He finishes up with a budget surplus of $203 million, and this $65 million is not the only expenditure of an extraordinary nature which the Minister of Finance incurred in the closing days of the fiscal year when he saw that he had this comfortable surplus.
If you will total those figures, sir, you will find that in round figures for the last five years the minister has been out something like $1,200 million in his estimates. The net average is about $240 million a year. If the Minister of Finance is running true to form this year, and there is no reason to think he is not, the budget surplus for which he now budgets, namely, $30 million, may be expected to turn out to be something like $270 million. On those figures, sir, there is no excuse whatever for any increase in the sales tax; there is no excuse for any of these increases in commodity taxes. There is very little, if any, justification for any increase in taxation at all.
What has the minister achieved by way of economies in expenditures, because he used some brave words about the necessity on the part of the government for reducing expenditures on non-defence items? Out of a total contemplated expenditure during this fiscal year of $3,700 million, the minister asks the house to regard as a great achievement on his part the fact that non-defence items have been reduced by $35 million as compared with last year. Poor little thing-$35 million! It is less than one per cent of the amount he is proposing to spend this year. That is the achievement of the Minister of Finance in carrying out all his brave talk about the way in which he was going to economize this year and reduce expenditures. Remember, if you will, that the reduction of $35 million on non-defence items was based on a comparison not with a year of slight expenditure but with a year of swollen expenditure, because in the fiscal year ended March 31, 1950, this country spent more than in any year since 1946.
We will not soon forget the brave words used by the Minister of Finance in this house last September 7, 1950, when at page 420 of Hansard he said:
I can assure the house that this search for economies will be pressed forward, and that in preparing the estimates for next year a rigorous standard of essentiality will be applied.
I Mr. Fleming.]

The result of those efforts is a reduction of less than one per cent in the total expenditure. What an accomplishment! What a triumph of labour on the part of the Minister of Finance! What ground for a due return of thanks to his colleagues that he offered in the course of his budget speech last Tuesday night!
Now, sir, when we are talking about economies and the elimination of extravagance in this budget, when we call for the squeezing of the water out of this budget of expenditures, we of the opposition say: Which would you rather have? Would you rather have some contraction of these expenditures, or do you prefer an increase in taxes, an increase in the sales tax, an increase in commodity taxes, an increase in the personal income tax? Well, the answer of the government is that apart from this trifling and inconsequential reduction of less than one per cent as compared with the total expenditure this year, they apparently prefer to soak the people of Canada with these new and greatly increased and oppressive exactions.
Where is the economy drive that the Minister of Finance so bravely talks about? Sir, it is abundantly clear that this government is impotent to undertake any serious drive directed at the elimination of extravagance. It is no credit to this government that when members of the opposition have been critical of the government because of extravagance and wastefulness, and when we have put forward concrete proposals for the establishment of machinery here that will give the house an opportunity of participating in this design of the economy drive, the government, as I said earlier, has taken gleeful satisfaction on every occasion in defeating those efforts. Here we are, still lumbering along in this house with this clumsy old procedure of committee of supply, with every member of the house a member of the committee. We still have the clumsy, awkward procedure that never gives any member of the house an opportunity of getting down to details of this problem in a way that would be possible if we had some up-to-date procedure in the form of a special committee of the house on the estimates. But the Minister of Finance will not have a committee of the house sitting on the estimates to give detailed scrutiny to those estimates. So far as the poor old standing committee on public accounts is concerned, it is not given an opportunity to do anything with respect to the estimates. It is to be compelled to be content with reviewing stale expenditures. So, sir, let us be perfectly frank. There is in the present machinery established by this

house no effective review of proposed expenditures. We might as well admit the fact, and the government, with its tyrannical use of its majority in this house, simply defeats our efforts to apply that effective scrutiny which those swollen expenditures demand.
Is there any extravagance? Well, sir, time alone prevents my giving in greater detail some of these examples of extravagance; but let me remind you of just one or two examples. Last year, my colleague, the hon. member for Kamloops (Mr. Fulton), put before the house the startling-yes, shocking- fact that expenditures on travelling, publicity and sundries in the estimates of that year totalled $49 million, exhibiting a startling increase year by year, as the government spending machine has demanded more and more oil. What do we find this year has been accomplished by the government in this so-called "economy drive" in relation to travelling expenses? Well, we find, sir, that the Minister of Finance reports an increase in the appropriation for travelling and removal expenses, going up from $27,786,602 in the year 1950-51 to a figure of $36,309,109 for this current fiscal year. Let me remind you, sir, that the figures last year included defence expenditures as well. If you take out the defence expenditures in both years you will still find that the contemplated expenditures this year by the government on travelling show an increase as compared with last year.
Is it not about time, Mr. Speaker, that some effective brake was applied to many of these expenditures, which cannot be justified in times like these when the government is making these huge impositions on the people? And yet, where there is this deliberate choice between soaking the people on the one hand, and effecting necessary reductions in extravagant expenditures on the other hand, this government's deliberate choice is the soaking of the people with more and more taxes.
Let me turn now to some of these proposals of increases in the already heavy load of taxation borne by the people of Canada, and let us especially measure these proposals in the light of the professed object of controlling inflation. Here we see an increase of 20 per cent in the personal income tax, and the Minister of Finance thinks that he is entitled to great credit for not having reduced the exemption below the present relatively low figures of $1,000 for single persons and $2,000 for married persons without dependents.
Let me remind you, sir, that when these exemptions were established two years ago the Progressive Conservative party in this house, and on the hustings in the election
The Budget-Mr. Fleming campaign that followed, demanded exemptions at that time of $1,200 for single persons and $2,400 for married persons. Measure today the burden of the increase in the cost of living on people of low means, and I think you have there a sufficient refutation of the claim of the Minister of Finance for any credit whatsoever for not having reduced these already very low exemptions.
Then he goes on to impose sweeping increases in indirect taxes. He proposes to take $3,730 million out of the pockets of the people this year as compared with what one might have thought was quite a heavy load of $3,105 million last year. Thus this year in the 11J months which remain between now and the end of the fiscal year on March 31, 1952, the Minister of Finance proposes to take $625 million more out of the pockets of the people than the swollen sums that he took last year. Let us examine these indirect taxes, because the Minister of Finance has announced sweeping increases in the sales tax from 8 per cent to 10 per cent, and a sweeping increase as well in other commodity taxes in the form of excise taxes.
We say, sir, concerning these indirect taxes which are levied at the producer's level, that they are all subject to certain inherent vices. There has been no effort on the part of the Minister of Finance to grapple with these vices in announcing sweeping increases in taxes of that nature. He is going to go on taking more than 40 per cent of his total revenue this year in the form of these indirect taxes.
In the first place, sir, they are hidden. The people do not have an opportunity of measuring the extent of the taxes that they are paying when they buy things which have already been subjected to these heavy indirect taxes.
In the second place, these taxes pyramid as they pass from hand to hand. Several years ago I gave in the house an actual example of a manufacturer who sells his product at $1 a unit. He adds the 8 per cent sales tax. He sells to the wholesaler. The wholesaler adds his 20 per cent mark-up, not only on the $1, but on the 8 cents tax as well. It passes on to the retailer, who in turn adds a 50 per cent mark-up, not only on the tax, not only on the mark-up on the tax, but on the 50 per cent mark-up on the mark-up on the tax.
Consequently, in that case what the consumer pays is not 8 per cent, but 14-4 per cent. And if by chance there should be one other hand in the process through which those goods pass, for instance a jobber, the

The Budget-Mr. Fleming poor consumer will pay, not simply as in the case I gave, a mark-up on the mark-up on the tax, but he will be faced with a mark-up on the tax, plus a mark-up on the mark-up on the tax, plus a mark-up on the mark-up on the mark-up on the tax.
What does the Minister of Finance (Mr. Abbott) say about all that? He not only accepts the process, but he wants to go on and increase the tax. In that way, by an increase in the tax at the source, you will find that the spread, the pyramiding, will increase greatly. It will be far more than in the case I gave, from 8 per cent to 14-4. In that case the increase will spread by the additional 25 per cent to 18 per cent.
That brings me to an observation concerning taxes of this kind, that the government gains less than the consumer pays on account of the tax. The government does not receive in that case 14-4 per cent. Under this shocking tax the minister will not be collecting 18 per cent. No, he will receive 10 per cent, as in the former case he received just 8 per cent. And what justification can there be for taxes of that nature, where the government gets into its coffers far less than the consumer has to pay on account of the imposition of the tax?
Those are weighty enough reasons in normal times, but in a time of inflation, surely this is far from being a time when taxes of this nature should be increased. It is a time when, if the government were really serious in trying to combat inflation, it would be reducing taxation of that kind. And I say to you that the sales tax in this budget ought to have been reduced, if the government really meant seriously to confront the problem of inflation with a series of effective measures.
The fourth vice of the hidden tax, which is so objectionable at a time like this, is that the government inevitably increases the cost of the goods, but it does not create any more goods in the process. It simply intensifies that process of inflation which has been described as too many dollars chasing too few goods. This kind of taxation does not create any more goods; it simply increases the cost of the goods.
Now, do you recall the year 1935, when the late Mr. Mackenzie King went up and down this country during the election campaign of that year and, as reported in various dispatches of the Canadian Press, denounced the sales tax in these words:
That iniquitous tax which presses alike on the rich and the poor.
"That iniquitous tax"-do you heed those words? And yet the Minister of Finance
I Mr. Fleming.]

today is proposing an increase in that iniquitous tax.
When the late Hon. J. L. Ralston as minister of finance, on June 24, 1940, came to make his budget speech, he dealt with the subject of the sales tax in these words:
We realize that increases in indirect taxes disguise the burdens imposed by the war but they are much more likely to distribute these burdens harshly and unfairly.
And what Mr. Ralston had then to say about the burden of war taxes can be applied with equal force and validity today to these increases in taxes necessitated by the expansion of our defence program, as well as by the government's inability to curb its own vaulting extravagance.
When Mr. Ilsley in the following year made his first budget speech, on April 29, 1941, he said this:
An increase in the sales tax has, I think, been fairly generally expected. At least, there are evidences of a good deal of buying in anticipation of such an increase. This tax, while comparatively easy of administration and collection and extremely productive, has marked defects as a fiscal instrument. After extended consideration, we decided on balance against any increase. In coming to this decision, we were not forgetful of the problems of agriculture, which would have been intensified had the sales tax been raised.
And, sir, by the increase in the sales tax today, following Mr. Ilsley's sound reasoning, the burden which agriculture is unfairly being called upon to bear today will thereby be intensified.
Then Mr. Ilsley had something further than that to say in peacetime, because when he brought in the budget on October 12, 1945, he had this to say concerning the sales tax:
I have been impressed also with the extent to which the sales tax is having a discouraging effect on the rapid and efficient modernization of our productive equipment.
And later on he says:
Particularly we should remove those taxes which, imposed far back in the production process, increase costs out of proportion to the contribution which they make to the revenue.
Mr. Speaker, could you have more effective indictments than those of the sales tax, in general, and thereby of the proposals the Minister of Finance has put before the house that those burdens should be intensified now, and that the iniquities of these indirect hidden taxes should! now be multiplied? The Minister of Finance should be called upon in this house to withdraw his proposal for this 25 per cent increase in the sales tax. At a time when people are having so much difficulty in purchasing clothing, boots, shoes, shirts, furniture, let us remind ourselves that these necessities of life are subject to the sales tax, and that that tax is going to be

greatly increased. The Minister of Finance could not have done worse than he has done in this proposal.
And, sir, his proposals with reference to commodity taxes are open to the same kind of objection. I wish I had time to review them; but what he has done, apparently, is to choose out many things that are necessities for most people, and to pass over such things as liquor, in the process. He has fastened on things like irons and ironers, electric kettles and electric toasters for an increase from 15 to 25 per cent in the tax which was unfairly imposed upon them last year.
He goes farther, and he applies that tax, now increased to 25 per cent, to a range of articles which were not subject to it before, including clocks and watches, fountain pens, luggage, shopping bags-with the exception of paper ones-and I suppose we will all be carrying paper shopping bags soon, under this budget. It includes cameras also. There has been no attempt in the budget to distinguish between articles that are expensive, and thus extravagant, and articles which are not expensive, and are necessities for people in every walk of life.
He comes along and imposes a new 15 per cent tax on electric stoves, hot plates, washing machines and refrigerators, thereby inevitably increasing inflation and casting further heavy impositions upon young married people.
While at the same time he makes a great to-do about reducing the tax on candy and soft drinks, let us look a little further and heed the effect of the sales tax. I read in a dispatch from Toronto, as reported in the Globe and Mail of April 13, that a board of education committee meeting was told by business administrator Fuller that the increase to 10 per cent from 8 per cent in the general sales tax would add $4,000 to the price tag on classroom supplies, such as scribblers and pencils.
Now, can you imagine anything more utterly foolish than to heap all these exactions on the things that people have to buy, and thus intensify the unfairness of a tax which bears more heavily, relatively, on people of small means?
And sir, in measuring the inflationary effect of the budget, and the futility of the policy of the government, let us not forget that there are already rumblings of demands for a general wage increase, as a direct result of these burdensome impositions.	.
There is another aspect of this matter to which I should like to refer. At the dominion-provincial conference the government came 80709-136
The Budget-Mr. Fleming forward and apparently agreed to an amendment to the constitution to give the provinces the right to levy a 3 per cent turnover tax. While that matter was under discussion, while negotiations were proceeding between the dominion and the provinces; after giving the provinces to understand that it would facilitate an amendment to the constitution to permit them to levy that objectionable kind of tax, this government now comes forward and slaps on a 2 per cent increase in the sales tax from 8 to 10 per cent. They beat the provinces to the gun, and have made it that much more difficult for the provinces, even in the unfortunate event that there should be an amendment to the constitution permitting them, to impose such a tax. This government has made it virtually impossible for the provinces, having regard to the actualities of the taxing situation, to use that taxing power, for that would mean an increase from 8 to 13 per cent in these taxes levied at the consumer level, or a total increase of 62-5 per cent in this kind of tax as a result of these measures of the government. In that way I say that the government has broken faith with the provinces.
There are just two more matters I should like to discuss. I wish to say just one word on the subject of personal savings. I am sure that there never was a time when it was more desirable that people should have the opportunity of setting aside personal savings. As under the inflationary heat they watch their savings in the form of life insurance melt away, they need more savings with which to buy more insurance in order to protect themselves and their families. At this very time the Minister of Finance reports that last year there was a drop of $270 million or 30 per cent in the total personal savings in Canada. That is a most significant decrease when you consider that the national income in terms of the same kind of dollars has been rising rapidly. The budget is going to take another $625 million from the personal savings of the people, which last year were just $645 million. Unless there is some relief for the people, unless the figures change, unless there is an increase in savings or some relief so that they may increase their personal savings, this budget is going to take all of last year's total personal savings in Canada, less $20 million.
I say in conclusion that if the purpose of this budget was to stimulate inflation, the minister could not have done a more effective job. On the other hand, if his purpose was, as he professes, to control inflation, he could not have done a much worse job. This budget and these taxes will intensify inflation. They will accelerate inflation. They abet inflation.
2112	HOUSE OF
The Budget-Mr. Shaw They share in inflation. This budget profits by inflation. This budget was conceived in inflation, and it proposes to live on the avails of inflation.


Mr. F. D. Shaw (Red Deer):: Mr. Speaker, my first remarks of this afternoon will relate specifically to the financial proposals contained in the minister's budget. After having completed that reference I intend to deal with the Canadian coal mining industry, which industry at the moment is suffering considerable stress and strain. After having listened to the speeches delivered yesterday by the three opposition leaders I am forced to conclude that there is actually little left to say with respect to the principal weaknesses in the budget unless I am to indulge in rather prolonged repetition.
Hon. members will appreciate that because of the arrangements for speaking in this house the financial critic of the official opposition is placed in the position of being able to move an amendment if he so desires. The second speaker is the leader of the C.C.F. who is in position to move a subamendment, which was done in this case. That leaves us in the position where we are not able to move an amendment even though we should desire to do so. Even when a decision has been rendered on the amendment and subamendment we are still prohibited under the rules from moving an amendment.
I should like to turn for a moment to the amendment moved by the financial critic of the Progressive Conservative party. This amendment asserts in its first paragraph:
The proposals of the Minister of Finance are unsatisfactory because they will inevitably increase the cost of living for all and especially for those least able to bear it.
My leader indicated in the course of his remarks yesterday that that is the conviction which we hold.	The second paragraph
asserts:
This house condemns in particular, as inflationary, the increase by 25 per cent of the general sales tax and is of the opinion that the increase is unnecessary and unwise.
In the course of his observations my leader indicated that we concur in those observations. The third paragraph reads:
This house further condemns the heavy increase in excise taxes on certain essential commodities and is of the opinion that much of the government's proposed huge increase in taxation is due to its own extravagance.
Before a decision is reached on this section I should like to have one or more Progressive Conservative speakers elaborate upon that reference to extravagance. I realize fully that it is an easy reference to make, but I


would feel much better if the subject could be elaborated upon by a subsequent speaker. The fourth clause reads:
The house regrets the failure of the government to take effective steps to deal with profiteering.
We concur fully in that. The leader of the C.C.F. (Mr. Coldwell) added a further clause to that amendment, reading as follows:
This house further regrets the failure of the government to exempt from the proposed 20 per cent defence surtax the incomes of single persons up to $1,500 and the incomes of married persons up to $3,000.
We concur in that. If the exemptions which prevailed prior to the very substantial increase in the cost of living were just, then it is particularly proper that we should press at this time for the raising of those exemptions. When 1 examine the budget I am personally convinced, be the facts what they may, that it was thrown together in a hurry. It reminds me very much of the housewife who is an afternoon bridge addict and who discovers about five minutes to six that her husband will be home from work almost immediately after six o'clock and it will be necessary for her to rush home, slap some things together and call the result a dinner. That is the impression I cannot help but take out of the budget.
The minister has asserted that his purposes are twofold: First, to raise money to meet government expenditures and, second, to use financial methods as an economic weapon designed to influence and control the factors working upon the economy. In simple language, it was an attempt to curb the inflationary trend.
Obviously the minister had in mind the killing of two birds with the one stone. The minister's almost savage bites at income, and let us not forget for one moment that he sank his teeth deeply into moderate incomes, is designed to siphon off enough purchasing power to reduce prices. I am personally convinced, as has been said by previous speakers, that the things which he has done must inevitably have a completely opposite effect to that which he seems to desire. The sales tax has been characterized as being iniquitous. Knowing the hon. member for Eglinton (Mr. Fleming) as I do, I rather fancy that if he had not been quoting when he used the word "iniquitous" he would have found some much more effective and appropriate language with which to describe it. If I were anywhere except here I believe I could think without any difficulty of appropriate language with which to describe the increase in the sales tax. The increase of 25 per cent will certainly aggravate the position of the low and middle income groups.

The excise tax on washing machines, stoves and refrigerators is like a twisting and grinding foot that has been on the throat of the ordinary man for all too long already.
After having increased the burden of costs on the low and average income groups by increasing the sales tax and by imposing an excise tax on additional commodities, the minister then deliberately hit below the belt by imposing an additional 20 per cent surcharge on income tax. I think that the Canadian consumers, particularly those in the low or middle income groups, can quite properly cry foul. However, since the minister is not only the offender but the referee the little fellow can only cry foul in vain. Actually the whole budget represents nothing more or less than a kick in the teeth of those who during the past several months particularly have laid such emphasis upon the rapidly increasing cost of living which, as has been stated by my leader more than once, is undermining the health of many Canadian people, is lowering their morale, and could in effect actually threaten Canada's defence effort.
Because of higher taxes, because of higher living costs-and they are certainly going to be higher as time goes on-it is inevitable that organized labour and others will demand higher wages. Let us make no mistake about it. The result is certainly bound to be a swamping of any good purposes which the government may have had in mind, or hoped to accomplish, as a consequence of the budget. Obviously the government and the Minister of Finance have found it desirable to either overlook or forget that fact. It was said by the Minister of Finance that the sales tax does not apply to so-called staple foods. It is argued that because of this it will not increase costs for a good many people. May I ask the minister this question? Even though for the sake of argument, we were to accept his view that it will not increase costs, can he say that it will decrease costs to the Canadian people? His answer could not be yes under any circumstances.
As I have stated once or twice already, it is going to increase the cost of living of the average family in Canada. While still referring to the sales tax, I might say that I received a communication from one of my constituents only today. It is not often I get a request that entails so much difficulty in the preparation of an answer. This chap submitted this to me and asked me to comment. I cannot comment so I am going to put it on the record and let the minister or the parliamentary assistant to the minister do so. He refers to the sales tax as part of
The Budget-Mr. Shaw a vicious circle or, as he calls it, part of the house which Abbott built. He says that first you have the sales tax. Then you have the rise in the cost of living to pay the sales tax. Then, he says, there is a demand for higher wages to meet the rise in the cost of living to pay the sales tax. Then, he says, there is the granting of the demand for higher wages to meet the rise in the cost of living to pay the sales tax. Then he says there will be an extra issue of money or more taxes to meet the granting of the demand for higher wages to meet the rise in the cost of living to pay the sales tax. Then he says there is likely to be devaluation of the extra issue of money to meet the granting of the demand for higher wages to meet the rise in the cost of living to pay the sales tax. Then he says there must be, according to his way of thinking, another sales tax to-or has Mr. Abbott's house by this time collapsed?
I hope that either the minister or his parliamentary assistant will indicate to me some time during this debate whether this man's thinking is right or wrong, and if it is fallacious I should like to know in what respect. Certain of these so-called non-staple goods include tea, coffee, cocoa, mustard, relishes, prepared household beverages, vinegar, flavouring extracts, sauces and so forth. The minister knows as well as all other hon. members of the house know that, while we cannot properly categorize these things as staples, they are found on almost every table at each and every meal. In effect they have become staples. They are to be taxed, and the tax is to be heavier as a consequence of the 25 per cent increase in the sales tax.
It was said in the house yesterday that certain merchants have taken advantage of these tax increases to extract from the Canadian people actually more than the new taxes represent. There is no denying that fact. I would be the first to admit that most merchants are perfectly honest. However, there is evidence that in some cases not only is the tax which has been imposed larger than that which the increase actually represents, but certain merchants impose the taxes on goods which they had in storage in large supply, and the government cannot possibly benefit as a result of the additional tax upon them. The Canadian consumer, however, is bound to suffer as a result of prices going up when it was not necessary for them to do so. Where definite evidence of that sort of thing can be found I think that action should be taken to impose penalties.
Since the minister delivered his budget statement, I have read a number of statements such as the following: It could have
80709-136J
2114	HOUSE OF
The Budget-Mr. Shaw been worse. Certainly it could have been worse, but in my opinion that is a poor standard by which to judge. It is very much like a doctor saying to an individual: Brace up, my friend, you have chicken pox; it could have been worse; it might have been smallpox. My opinion is, and has been right along, in spite of everything contained in the budget, and in fact because of certain things contained therein, that certain effective action must be taken by the government now to stop the ever-spiralling cost of living. We must remember that, at this very time when we are presumed to be developing a defence program within our nation, at a time when we are presumed to be developing security measures designed to combat sabotage within our country, at this very time when we are participating in external conflict outside of our country, at a time when we are supplying arms to those who, with us, desire to preserve the democratic concept of life, we are doing other things which can in effect destroy our entire effort to make the maximum contribution toward the preservation of democracy.
Yesterday the financial critic of the Progressive Conservative party quoted Stalin's reference to currency. I think there are numerous quotations which could be taken from communist propaganda and which would be just as effective. Karl Marx, who together with Engels produced the communist manifesto, stated more than one hundred years ago that there was only one way to kill capitalism; that was by taxes, taxes and more taxes. Had he been dealing with the situation today he might have said crazy taxes and crazier types of taxes, because that seems to be the trend in our country.
I appreciate that a substantial portion of the taxation now imposed results from obligations which arise in connection with the defence of our country. The other day I asked the Prime Minister (Mr. St. Laurent) if it were the intention of the government to set up a defence expenditures committee, comparable to the war expenditures committee which served during the war and to the war expenditures and economies committee which functioned shortly after the war. In view of the fact that we intend to spend $5,000 million for defence purposes over the next three years I am convinced it is absolutely imperative that a committee of this kind be set up without delay. I am not favorably disposed toward referring this matter to the public accounts committee, but I will not elaborate on that point.
Yesterday the hon. member for Rosetown-Biggar (Mr. Coldwell) made reference to small loan companies. I had intended to 

refer to those companies myself, and had good reason for doing so. When certain credit restrictions were adopted, I understand voluntarily in part, the small loan companies across the country became as active as beehives. As a matter of fact I rather feel there may be some intrigue in high places. During the Easter recess two cases came to my attention, and without mentioning names I should like to indicate to the house the nature of those cases. One man wanted to expand his small business, and negotiated a loan from a chartered bank. He was advised that the money would be available, but before he had an opportunity to use it he was advised that "due to government regulations" they had to withdraw the loan. Within two days the manager or a representative of one of these small loan companies approached this man and said, "We hear you require $2,000. We are in a position to make the money available to you." Where did that man get his information? Only two men knew about this, the businessman and the bank manager. There may be some significance in the fact, as he said to me, that these small loan companies can compound their interest to the point where the borrower is paying 18 per cent. It could be that there is connivance between these financial institutions.
That is as far as I am going, except to say that recent statistics indicate that the loans made by small loan companies have multiplied in recent months. Many young people maintaining their own domiciles and experiencing acute difficulty in living on their present incomes are going in and mortgaging their furniture and their cars, if they have cars, in order to borrow from small loan companies and get by what they think is a temporary condition, but which I am afraid is going to be anything but temporary. As a consequence I fear that many of these families are going to be completely destroyed economically. That is all I intend to say on this matter at the moment, but I would suggest to the minister that this aspect of the situation be checked rather carefully.
I mentioned earlier that I desired to refer to the question of coal. I do so because, as I elso raid, the coal mining industry in Canada is suffering great stress and strain today and if appropriate action is not taken without delay the situation is likely to become far more acute. I come from a province in which is found approximately 92 per cent of Canada's coal reserves, and I represent a constituency in which coal mining is an important industry. Speaking in the house yesterday, the hon. member for Cape Breton South (Mr. Gillis) expressed certain of his

fears, and I can sympathize with the way he feels. He referred to the export of gas from Alberta to central Canada and the detrimental effect he thought that might have upon the coal mining industry and the general industrial development of the maritimes. The hon. member also registered opposition to the development of the St. Lawrence seaway project, for very similar reasons.
I am not referring to these measures for the purpose of criticizing what the hon. member had to say. I believe he is quite right to feel as he does, but I cannot agree that we should give up any idea of exporting gas and oil to central Canada, nor can I agree that we should permit the St. Lawrence project to remain undeveloped. In my opinion these things need not have a detrimental effect upon industry either in the maritimes or anywhere else, but certainly steps will have to be taken in order to obviate what could occur if we just continue to drift. As I say, I come from Alberta, where we have had tremendous gas and oil developments particularly since 1947; yet in that same province we have a tremendous coal mining industry. When I tell you that we have 92 per cent of Canada's coal reserves there; then when I tell you that last year we produced 27,595,702 barrels of crude oil; when I tell you there are 2,088 producing oil wells in Alberta-775 being at Redwater, 548 at Leduc, 329 at Turner valley and 446 in other areas; when I tell you there are 401 gas wells producing; when I tell you there were 59 million acres of crown and privately-owned land under exploration in 1950; when I tell you there were 127 drilling rigs in operation last year and that in 1950 alone they drilled over 820 miles of wells: then you will realize why the coal miner in my province is a bit exercised about what could conceivably happen to him.
I do not hold the fears some people seem to have. In the first place, as I say, I cannot believe that we should even think of retarding progress. I pm not unmindful of the fact that when the generation of electric energy was undertaken in volume a great many people felt that it would result in the destruction of not only the coal mining industry but other industries within the country. I am particularly pleased that we have had this gas and oil development. As a matter of fact, even though there are coal mines in my own constituency I do not hesitate to assert that I have joined with others in pressing to have gas brought into my town. I know that it is cheaper than coal; I know it is cleaner to handle; and I know it is easier to handle and regulate in connection with the heating of my house. At
The Budget-Mr. Shaw the same time, I must say that we in Canada must concentrate upon the development of new markets for Canadian coal. There are parts of Canada which could not conceivably be supplied with gas. We must determine new uses for coal-as a matter of fact, the word "determine" is not a good one. We already know uses to which coal can be put. We must undertake the extraction of the products that can be derived from coal when it is broken, down. Moreover, if there should be a decline in employment in the coal mining industry as a consequence of the development of gas and oil, then certainly every opportunity must be provided to enable the coal miners to become established in other fields of employment.
Mr. Speaker, I should like to mention a few more things about coal. In Alberta there is an estimated 100 billion tons, and yet in 1950 there was actually less coal mined than in 1949. I know that the big Brazeau collieries at Nordegg in my own riding were inoperative last year owing to a tragic fire which destroyed their surface workings, and that contributed to the decrease in production. Two or three other factors contributed to it as well. During that same period, however, we imported more coal from the United States into central Canada than ever before. I have heard arguments about United States coal being cheaper. I have heard arguments about its being cleaner. But if we require this product some time during a period of national stress, and! imports are cut off, cheapness and cleanliness', will not be of much consequence.
Last year there was a decrease of almost' half a million tons in coal production in the province of Alberta. Actually, four mines in the Drumheller valley were closed. There is a bright spot, though, because in January of this year coal production was 807,456 tons as compared with 761,157 tons last year. We have had government subventions paid on the delivery of western coal. There has been a maximum rate of $8.40 a ton, with a subsidy of $2.50 a ton. It was only recently that we encountered a further increase in freight rates on coal from western to central Canada. There was an increase of $2.35 per ton. We are told that at this time next year the same thing is going to happen. Mr. Speaker, it has been estimated by reliable authorities that by next year, because of our inability to find other markets, -because of our failure to take proper action in connection with freight rates, because of the development of gas and oil, the production of coal in Alberta is likely to be two million tons less than in 1950.
This would mean two things. Many mines will go out of business, and it is proper for us

The Budget-Mr. Shaw to realize at this time that you just cannot allow coal mines to go out of business, then expect to have them start up again overnight. Every time a coal mine closes, it could well be a permanent loss so far as the industry is concerned. There are 10,000 miners in my province, and 75,000 people dependent upon the industry. It is a fight for survival. The loss of the two million tons to which I referred a moment ago is computed as being the margin of profitable operation. If we do not expand our markets, and production should fall by two million tons, it is conceivable there will be a collapse of that industry in that part of Canada. As Canadians, we cannot afford to allow the coal mining industry to be smashed. This is especially true when we are in the shadow of war, and may be in the shadow of war for a long time. It is equally true when we consider the vulnerability of our oil and gas fields, as well as the vulnerability of the refineries and pipe lines.
At the moment there is an acute shortage of power in the country. Surely, there is a market for a tremendous amount of coal, -even low grade coal, if we expand our power developing industry in this country. The United States has been concentrating upon this for some time. They claim that they produce electrical energy more cheaply this way than by any other. Mr. Speaker, it all resolves itself into one very important factor. In referring to that important factor, I might well quote what the premier of Alberta recently had to say about this subject:
The production of coal in 1950 amounted to D, 118,206 tons, valued at $41,631,579 as compared with [DOT]8,616,981 tons, valued at $44,541,538 in 1949. This decline is at least partially due to the stiff competition which the coal industry is facing from oil and natural gas. The principal consumers of Alberta's bituminous coal are the two transcontinental railways and their program of conversion to oil burning and diesel locomotives makes it imperative that other markets for bituminous coal be developed.
The railways have announced that on March 31, 1951, the special freight rate of $8.40 per ton on Alberta coal moving to the Ontario market will be cancelled. The so-called normal tariff is $13.10 a ton and the railways propose to re-establish such rate by means of two increases-one of $2.35 per ton effective March 31, 1951, and a second similar increase effective a year hence. This will render substantially more difficult present efforts to establish an eastern Canadian market for Alberta coal and emphasizes the need for a national fuel policy designed to open Canadian markets to Canadian producers.
What I was coming to, Mr. Speaker, is that Canada requires a national fuel policy. May I call it six o'clock?
At six o'clock the house took recess.
fMr. Shaw.]


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


Mr. H. W. Winkler (Lisgar) moved: that the following bills be read the second time:
Bill No. 170, for the relief of Viola Rupert Moran.-Mr. Winkler.
Bill No. 171, for the relief of Philip Rosen.- Mr. Winkler.


Mr. Speaker:: Is it the pleasure of the
house to adopt the motion?


Mr. Gagnon:: On division.


Mr. Speaker:: Carried on division.
Motion agreed to on division and bills read the second time.



CANADIAN LEGION OF THE BRITISH EMPIRE SERVICE LEAGUE

Mr. David A. Croll (Spadina) moved: the second reading of Bill No. 190, respecting the Canadian Legion of the British Empire Service League.


Mr. Brooks:: Is the hon. member going to explain the bill?


David Arnold Croll: Mr. Speaker, this bill is presented on behalf of the Canadian Legion of the British Empire Service League. I am not going to say very much about the organization, which is very well known in this country. It is a very important and a very influential organization of war veterans which reaches into every home in this Dominion of Canada.
It is a very simple bill. Its purpose is to make three changes in the act. When these changes are made the objective will have been attained, which is further to democratize the Legion. At the present time the bylaws and regulations of the Legion can be amended by the dominion executive. When the bill came before the house in 1948 some members were critical in a kindly way of that particular aspect of the bill. This bill will no longer empower the dominion executive to pass bylaws and regulations, but rather will leave it in the hands of the dominion convention.
In addition to that, it proposes to give the provincial conventions the right to enact bylaws and rules governing their own command, provided that those bylaws and rules are not inconsistent with nor contrary to any passed by the dominion convention.
Its third purpose is designed to protect the badges, insignia, and regalia against use by

persons other than those authorized by the Legion. This house will appreciate that no outsider should be permitted to capitalize on the goodwill and the reputation which the Legion bears in this country. That is all there is to the bill. I trust that it will appeal to members of the house and that we shall be able to pass it tonight.


Alfred Johnson Brooks: Mr. Speaker, it
is not my intention to oppose this bill in any way. I think it will meet with general acceptance so far as the house is concerned. It is a bill which has been before the other chamber, and I understand that it was recommended by the committee of the other chamber without any amendment.
The hon. member for Spadina (Mr. Croll) has said that the original bill as now being amended was before this house in 1948. At that time there was considerable debate on the different sections of the bill. I think that this bill corrects some of the matters which it was felt at that time should be corrected.
I should like to say a few words, Mr. Speaker, with reference to the Legion and its organization. Before 1948 I understand the Legion was organized under the different provincial companies acts, and we are not surprised that an organization of its size and extent should look for a dominion charter.
The Legion has had tremendous growth. As we all know, it started after the first world war, and then of course after the second world war it practically doubled its members. I understand that there are over 2,000 branches in Canada today, and I believe it has a membership of around 400,000. Its members consist of ex-soldiers who fought in the South African war, in the first world war and in the second world war. Now we have men who are fighting in Korea who will also be eligible for membership in the Canadian Legion. Therefore we can realize what a large place the Legion has in the life of this Dominion of Canada.
I think that the success of the Legion since its inception has been due mostly to the calibre of the men who have been directing its destinies. One has only to mention such men as General Turner, General Currie, General Crerar, General LaFleche, Brigadier General Ross, General Price, Alexander Walker and men such as those, and last but not least, our present president, Alfred Watts. These men have been outstanding not only in the Canadian Legion but in other walks of life in this country of ours.
I should like to pay tribute, if I may, to some of the secretaries of the Canadian
The Canadian Legion
Legion. As I remember, when I first came to Ottawa-and I am sure that other hon. members who attended the different veterans committees will remember-Mr. Reg. Bowler was untiring in his efforts for the advancement of returned soldiers at that time. We had the late John Herwig, who also used to appear before our veterans committees. I should like to pay a special tribute, Mr. Speaker, to a gentleman who passed away here just last month. I refer to the late Richard Hale. He was known as Dick Hale. I remember Richard Hale attending all the meetings of the veterans committees of this house since 1935, and he was attending meetings before that. Dick Hale, as we knew him, was on the staff of The Legionary for ten years. He wrote the page called "The helping hand". For thirty-three years he worked for the disabled veteran. I do not think there was anyone belonging to the Legion or outside of it, Mr. Speaker, who had a better knowledge of the Pension Act or the other acts which refer to the soldiers' welfare than had Richard Hale. A recent article in The Legionary said that he had handled over 20,000 individual claims for different returned men; therefore thousands of men have reason to be very thankful indeed to the late Richard Hale.
I should also like to say that in my opinion, Mr. Speaker, never in the history of this country have we had such a splendid organization as the Canadian Legion is. The Legion, as we know, stands for practically all that is best in this country. They have worked and are working untiringly for the betterment not only of returned men but of our country in general. At this time, when it is necessary to consider pensions, and matters connected with the cost of living, the hospitalization of veterans, as well as the question of manpower and of civil defence, we know that all these matters are receiving very careful attention from the Canadian Legion.
I am also very pleased indeed that such a powerful body as the Legion is nonpolitical, and I hope this is something the Legionnaires and the organization generally will guard jealously.
The hon. member for Spadina (Mr. Croll) mentioned that it was an exclusive organization. As I said a moment ago, only those men who served in the South African war, or in the first or second world wars, are eligible for membership. Members of the Legion are proud indeed to belong to that organization and to wear its insignia. I am sure it is for this reason that in the bill there
2118	HOUSE OF
The Canadian Legion
is a section which will guard even more carefully the insignia of the Canadian Legion.
It is not my intention to say anything further. I am satisfied that the bill, coming as it does from the Legion, will meet with the approval of the house. So far as I am concerned, I am very pleased indeed to give it my approval.


Mr. O. L. Jones (Yale):: Mr. Speaker, I should like to join with previous speakers in paying my respects to the Canadian Legion, and its work in Canada. It is not often one has the opportunity to speak in the house about this organization, because it very rarely comes to the house with any request beyond those affecting pensions, or other matters handled through committees of the house.
I consider the Canadian Legion one of the greatest stabilizing influences in the Canadian economy and way of life. As a non-political organization, and working as it does through its committees in every town and village in the dominion, people perhaps are not fully aware of its work in those communities.
I should like to pay tribute not only to the secretaries in those branches but to the executive committees, men who not only give their time night after night to looking after the welfare of their fellow returned soldiers, but take an interest in the welfare of the whole community.
The bill aims to make the Legion still more democratic in its operation. In my view it is an advance to have dominion conventions make changes. I was wondering however if in the new section 15 there is not some weakness. We see that it says that no person except the Legion, or a person authorized in writing by the Legion, shall do certain things. My suggestion is that the meaning of the word "Legion" should be defined. Is it the provincial command, the dominion command, an individual club or a group that may be operating as a Legion in some small town?
I believe if the term is defined we will be further ahead than we are at the present time, because we know that certain local clubs have initiated drives-and I shall not mention the kind-which have not met with the approval of the command itself. As the act now reads, with the full blessing of the law a branch could carry out what is distasteful to other branches, or to the Canadian Legion command. I would ask the sponsor of the bill if he has thought of broadening the definition so as to clarify this situation. I am satisfied it is the wish of the Legion to keep the same control over its operations, and to prevent individuals or small groups from exploiting the good name and the insignia of the organization.


I am one hundred per cent behind the idea involved in the bill, and before closing my remarks I would ask for further clarification of that section. In the name of the people in my riding I pay the highest possible tribute to the work of the Canadian Legion in that part of Canada, where it has been operating for the last twenty-five years, since its inception.


Victor Quelch: Mr. Speaker, I should like to join with other hon. members in praising the very good work of the Canadian Legion. They are a great stabilizing force in times of peace and war, and they provide an agency to which any veteran may take his grievance, in the full knowledge that the Legion will do everything within its power to see that such grievances are redressed.
I recall that when the bill to incorporate the Canadian Legion was before the house in May of 1948 several members objected to section 5 on the ground that it provided1 for an undemocratic procedure in that the executive council would have the right to repeal bylaws or rules when the dominion convention is not in session.
At that time I did not oppose the section because I felt that, in view of the fact the Legion had asked for the enactment of the legislation and the request had come from the floor of the convention, the Legion knew best what it wanted. On the other hand I am glad this amendment is before the house, making provision that the bylaws can be repealed only by the convention instead of by the executive council. I also note the amendment provides that no person except the Legion shall have the right to manufacture, distribute or sell Canadian Legion insignia or emblems or badges. This is only right because it provides employment for veterans. I recall some years ago a most unpleasant incident in connection with poppy sales. We have always looked upon the manufacture of poppies as providing employment for veterans; yet at that time we found that a large number of poppies had been manufactured in Japan and sent to this country for sale. That certainly did not meet with the wishes of the people.
In the same way, I think it is desirable that the manufacturing of insignia should be carried out by veterans. It provides employment for disabled and blind veterans. Therefore I say the amendments in the bill merit the support of the house.


James Arthur Ross: Mr. Speaker, I should like to add a few words to those already expressed on behalf of the Canadian Legion. I well remember in the years that

followed the first great war the difficult time many of us had to bring forth some such organization as this. There were many attempts made, and different forms of veteran organizations were set up before the present Canadian Legion was brought into being. I think that today the Legion is probably the most influential organization in this nation.
As has been said by my colleague the hon. member for Royal (Mr. Brooks), they now have some two thousand branches with a membership of something over 400,000. He stated, and I agree with him, that much of the success has been due to the capable officers who have been in charge of this great organization.
Coupled with the names that have been set forth in Hansard I should like to add that of a personal friend of mine, the immediate past president, Colonel Baxter. Colonel Baxter is a very influential citizen and a good businessman who spends most of his time flying from one part of Canada to the other in connection with his business. Despite all this, he has given a great deal of time to the welfare and advancement of the Legion during the past few years. He was asked to continue in office at the last convention, but because of his business activities he found that he could not give any further time.
Mention was made of the secretaries, excomrades Bowler and Herwig, both of whom obtained their first experience with the Legion in my province of Manitoba. Both gave splendid service in the provincial command before taking office with the dominion command. They both gave great service on behalf of their comrades.
I think this amendment is much in order. I do not agree with everything in section 4 which amends section 15 of the act and which states:
No person except the Legion, or a person authorized in writing by the Legion, shall manufacture, distribute, sell, or use any Legion insignia, regalia, emblem, badge-
I think we should have some further information from the sponsor of the bill as to whether this would apply to just the executive officers. There is no more influential organization in Canada than the Canadian Legion. It would be difficult to enumerate the contributions they have made to the federal government and to this nation. During the last great war their assistance to the government of the day and to the people of this nation was invaluable. They have a stabilizing effect on the country in peacetime as well as in wartime. The civilian
The Canadian Legion
population of the country owe a debt of gratitude to the Legion.
I want to indicate my wholehearted support of the splendid work they are doing and say that I approve of these amendments.


Mr. H. P. Cavers (Lincoln):: Mr. Speaker, any organization with the fine reputation gained by the Canadian Legion during world war I, after world war I and during world war II should receive the consideration they are asking for with this bill. As one who had the honour of serving in the Royal Canadian Naval Volunteer Reserve I think I should say on behalf of the naval veterans that they have received great consideration and help from the Canadian Legion. In the part of the country from which I come there are five branches of the Canadian Legion. As the previous speaker has said, they have done great work in peacetime as well as during wartime and this bill commends itself to me as I think it will to other hon. members.
With regard to the amendment to section 15, I suppose there are those who take advantage of the insignia, emblems and other articles that might be sold by the Canadian Legion, so it is proper that they should be given the right to stipulate who shall have authority to sell these articles. Mention has been made of possible confusion with regard to the Legion. I have not the act before me but I would imagine the phraseology would be interpreted in the interpretation section of the act.


Mr. C. E. Bennett (Grey North):: Mr. Speaker, I should like to join with other hon. members in paying tribute to the Canadian Legion. There are a number of Legion branches in my riding and I say without qualification that they are exceedingly well managed and contribute a great deal to the well-being of the veterans and their families and to the general welfare of the whole district. The Legion branches have sponsored many worth-while activities-to mention only a few: community centre projects, hospital drives, the founding of high school and collegiate scholarships and so on, We have learned in Grey North that when a worthy cause is before the public the members of the Legion are solidly behind it. The Legion is playing an important part in the furtherance of Canadian citizenship.
In the old days the Legion was an army organization. Being interested particularly in the R.C.A.F., I am glad to say that the Legion today is a harmonious amalgamation of members of the three services. As would be expected, the president of the Legion is a former air force officer, Group Captain A.

The Canadian Legion
Watts, A.F.C., a world war II pilot and an efficient administrator. Group Captain Watts and the dominion executive council are providing aggressive and able leadership for the Canadian Legion organization.
As previous speakers have said, there is nothing particularly contentious about this bill. The first two amendments are constitutional changes requested by the Legion while the third amendment aims to protect the insignia, regalia and badges of the Canadian Legion. This is a very necessary amendment. As has been stated, the general public will be protected by this amendment because these articles will have to have the approval of the Secretary of State (Mr. Bradley). I am sure that this bill commends itself to the house.


Gordon Graydon: Mr. Speaker, I rise to commend this bill to the members of the house. As has been said more eloquently than I could say it by other hon. members who have spoken, the Canadian Legion is worthy of our support. I have a slightly different background from that of many of those who have spoken. I was denied the opportunity of enlisting in two world wars. Like a great many others in a similar position, I have a sort of complex with respect to matters of this kind.
When the nation is in danger and uniforms are worn by so many one feels that perhaps he is not doing his full share in the national interest. I have had that feeling keenly from time to time, as I suppose many others have, but there is not much one could do about it. Because of that background I welcome the chance to support the Canadian Legion on an occasion such as this when they come before us asking for amendments to their charter.
I think perhaps the proudest night in my life was about two years ago when the Minister of Labour (Mr. Gregg), then Minister of Veterans Affairs, came to our branch of the Canadian Legion of the British Empire Service League in Brampton on which occasion I was given an honorary membership in the organization. I look back on that night with the greatest of pride.
During the period between the two great wars and during the last war and since there has been a well-founded feeling that the Legion is in the forefront of all things that are worth while and worthy of patriotic Canadianism. Those feelings have found their core and centre in the Canadian Legion of the British Empire Service League.
We appreciate the opportunity of saying a word on behalf of an organization that has meant so much to Canada, to the empire-

yes, and to the world. I can speak tonight with perhaps a little more feeling and emotion than usual in supporting a bill like this which is designed to help the people who have made it possible for us to sit in this chamber and to legislate instead of having a different system of government under which we might be living today were it not for their valiant efforts. It is easy to forget over the years because time changes things so much. It is so easy for us to forget that between wars, as was the case between the last two world wars, there must be someone like the Legion, prepared to carry the torch of patriotism, endeavour and activity in the interest of all that is best in our national life. All these things the Legion has done and will continue to do. I might say again that one of the proudest moments of my life was when I was admitted as one of the members of that great band of men and women who have left and are leaving their mark for better citizenship and for the advancement and the betterment of Canada as a whole.


Mr. Poulioi:: In Brampton they always say it with flowers, and wonderfully too.


Mr. William Bryce (Selkirk):: Mr. Speaker, as another member of the Legion I want to join wholeheartedly in supporting this bill. I want to join with other members from all sides of the house in the nice things that have been said and the tributes that have been paid to the Canadian Legion. The many compliments that have been paid to the Legion are well deserved because the Legion has done a wonderful job. I do not think that any other party or club should be allowed to use the insignia or any other emblem or regalia that the Canadian Legion have used over the last twenty-five years. I do not want to take up the time of the house.
I merely want to say that I wholeheartedly support the bill.


Mr. L. E. Cardiff (Huron North):: Mr. Speaker, I too should like to associate myself with those who have spoken. I consider that the members of the Canadian Legion are the first citizens of Canada. I think we owe more to them than to any other group in our population. Therefore they are deserving of every consideration. It is not often we have a bill before the house on which all members on both sides can agree. I think it would be a very good thing if more bills came before the house on which members on both sides were able to get up and say that they agreed. The members of the Legion have certain privileges. I do not suppose there is even a small community in my riding that has not a branch of the Legion. They have rooms in which they congregate to enjoy themselves in talking over old times. I suppose

that is the reason that other people who have no business there would like to be able to get in with them. I am not a returned man and do not belong to the Legion. Because I am an outsider I feel that I should join with others in supporting the bill.
The Legion has done a lot of good. Those of us who have been members of the house since the last war ended have had before us problems concerning which we sometimes could not get what we wanted. The Legion would take up these matters and support us, and we would support them. I have had a lot of support from the Legion in trying to get things for men who were seeking to reestablish themselves after the war. Sometimes it was rather difficult. The government lays down rules and regulations, and unless somebody is generous-hearted enough to interpret the law flexibly someone is hurt. I sometimes think that no law that we pass is capable of taking care of all circumstances. There are certain cases where the law has to be administered with a little laxity. Unless the minister concerned with the administration of a particular law can see his way clear to be a little freer in his interpretation, then someone is hurt. It is not very long ago that I went to the minister about a certain case, and did not get any support at all.


Mr. Lapoinie:: It must have been a poor
case.


Lewis Elston Cardiff: It was not a poor case. If
you would like me to air it I would love to do so right now.


Mr. Lapointe:: I would not advise you to.


Lewis Elston Cardiff: It was a case that should
have been taken care of. It was not particularly within the law but, as I said before, we do not have any laws that can be administered properly unless there is some flexibility. If the bill will help the Legion in any shape or form I am all for it, or anything else that will help the Legion. They have done more for Canada than any other section of our population. For that reason I support the bill.


Jean-François Pouliot: Mr. Speaker, I agree with all that has been said about the veterans of the Canadian army. They deserve every praise that has been bestowed on them. However, as an honorary member, believe it or not, of the British Empire Service League, I have a word or two to say about the organization. I find that there is somewhat of an anachronism in the name of the Legion. It is like M.B.E., C.B.E., O.B.E., Commander of the British Empire, Order of the British Empire. The British empire no longer exists since India gained her independence.
The Canadian Legion


Mr. Harris (Danforih):: Order.


Jean-François Pouliot: It is the commonwealth of nations, not the British commonwealth, the commonwealth of nations. I wonder why the gallant men who belong to the Legion do not call themselves the commonwealth service league in order to be up to date.


Joseph Henry Harris: No, no.


Jean-François Pouliot: I cannot understand why some members put after their names the three fatidic letters, C.B.E., M.B.E. or O.B.E. It means they belong to the past. I will not move an amendment but I suggest that at the next session of parliament the Legion should come forward with legislation to change their name-


Joseph Henry Harris: No, no.


Jean-François Pouliot: -from British Empire Service League to commonwealth service league. Such an action would be understood by all. It would be the same gathering of fine men with the same recollections, but they must also think of the future and not live in the past by retaining a completely out-of-date designation.


Mr. F. E. Lennard (Wentworth):: As a
member of the Canadian Legion and a past president of the local branch of the Canadian Legion of the British Empire Service League, I join those who are not in favour of any change in the name.


Joseph Henry Harris: You are not alone.


Frank Exton Lennard: I have not risen in order to prolong this debate. I am absolutely in favour of these amendments. I believe they make for a better Legion, and I am all for them.


Mr. H. W. Herridge (Kootenay West):: rise to support this bill, Mr. Speaker; in fact I am very pleased with the amendments which are proposed. When the original bill was under consideration some members of this group questioned the wisdom of giving such wide powers to the dominion council, and I see that one of these amendments is intended to correct that situation.
I want to take this opportunity to express my appreciation of the good work done through the years by the Canadian Legion for veterans and their dependents, and for Canada as a whole. I am particularly pleased to note that the sponsor of this bill is himself a veteran who has taken a great interest in veterans affairs and has made a great contribution in the veterans affairs committee. Since 1926, when most of the veterans organizations in Canada were brought together to form the Legion, it has done a tremendous amount of work not only for

The Canadian Legion
veterans and their dependents but for the nation as a whole. Without a doubt the Legion is a tremendous influence in our democratic society, and its work in the national sphere is obvious to anyone close to veterans and their problems. The amendments to the Pension Act were largely based upon recommendations coming from the Legion. It might be said that the War Veterans Allowance Act sprang from the recommendation of the Legion. Then we have the great mass of legislation in the veterans charter, to which the Legion made a great contribution. The Legion did great work in helping veterans across Canada through its national pension bureau and the other services it renders. It has shown a great interest in national affairs, as was evidenced in the excellent brief presented to members of this house not long ago, upon which was based an interesting and important debate.
Then we come to provincial activities, which are manifold. I have had experience with those activities in British Columbia, like the hon. member for Fraser Valley (Mr. Cruickshank) and the hon. member for Coast-Capilano (Mr. Sinclair), who also has been very active in veterans affairs. As a member of the provincial legislature I remember the annual pilgrimage of the Canadian Legion to Victoria to bring to the attention of the cabinet the problems of the veterans with respect to employment, preference in the provincial civil service, and the relationship of certain legislation to veterans and their dependents, including the education of the dependent children of veterans. The Legion in British Columbia has closely followed the needs and requirements of the veterans and their dependents; and there, as elsewhere, the Legion is respected in the community.
The Canadian Legion is a democratic organization, in that its decisions are not made at the top and then handed around for others to adopt. They come from the bottom. Certain branches are grouped together in such a way that they can conveniently get together to deal with the problems affecting a particular area within the province. I am happy to say that the West Kootenay zone is one of the most active in British Columbia. I have been associated with it through the years, being a charter member of the Legion, having been president of the branch for ten successive years, and a member of the provincial executive. I have been associated with many men and women who have worked actively in the interests of the Legion, so I have a personal knowledge of what the Legion stands for. In our zone we have an excellent magazine called The Banner, which
[Mr. Herridge.l
covers the activities of the various branches where the resolutions originate that are sent to the provincial convention for consideration. The whole organization is based upon the branch, where the real work of the Legion is done.
Time will not permit me to describe the many things done by the local branches of the Legion throughout Canada. The branch, being close to the people, is close to the problems of the veterans, and from the local branches come the questions which are finally taken up by the dominion convention. This has been the practice through the years, and has been possible because numbers of veterans, men and women, have been willing to accept their personal responsibility for the welfare of the veterans and their dependents. In my opinion if we want to demonstrate our appreciation of the work of the Legion in Canada it is up to us to pass legislation that will give a better deal to pensioners, the recipients of war veterans allowances, and veterans and their dependents generally.


Joseph Henry Harris: Mr. Speaker, I want to take about twenty seconds to say that I favour this bill and congratulate my colleague from Toronto on bringing it before us. I hope it passes unanimously.


Mr. Clarence Gillis (Cape Breton, South):: Mr. Speaker, it is not the intention of anyone to talk out this bill, but I feel it incumbent upon me to make a few remarks. I am in accord with the amendments proposed. I say I feel obliged to say something about it because in 1948, when the original bill came into this house, practically writing the constitution of the Canadian Legion, I took exception to the powers that were vested in the executive at that time. Now I think time has proven me correct. My protest at that time was against granting the executive head of the Legion the right to cancel charters, to decide on memberships and all that sort of thing, without reference to the branches or commands. I believe the first amendment proposed in this bill has been brought in because the fears I expressed at that time have been shown to be justified. It is now proposed to divest the executive head of the organization of the power to make hard and fast rules infringing upon the rights of the membership down into the branches, and to hand that power back to the convention.
The second proposal is that the provincial convention should have the power to make regulations and so on, which power was taken from it in the previous bill. In effect we are really getting back to the position that existed before the bill was adopted in 1948. I have

seen a very disturbing thing happen in two or three places in Canada, I think in British Columbia, Quebec and on the island of Cape Breton, where there were what were known as district command charters. These were granted by the provincial command to a certain area, which gave them jurisdiction in that area to promote the best interests of the Legion in accordance with provincial and national policy. The one to which I have particular reference is the Cape Breton district command. After being in existence for twenty-five years, and doing an excellent job of organization and promoting, that command lost its charter after the last convention. This was done without any consultation with the provincial movement or the command affected. It created considerable resentment and turmoil. So far as I know, that matter still stands as it was a few months ago when I discussed the problem with the people who carried on the work of that command.
I am in agreement with the amendments that are proposed here. I am also very much interested in the proposal contained in section 4, that the name of the Legion be not used for certain purposes. I recall that when I was actively associated with the Legion in an official capacity some very lucrative offers were made to us if we would allow the name of the Legion to be used to promote sweepstakes and gambling of different kinds. The Legion always turned thumbs down on that kind of thing. It was a matter of principle, because there was no written prohibition. I am glad to see the prohibition being specifically written in now, so that the name of the organization cannot be used for that purpose.
I thought, Mr. Speaker, in view of my very critical opposition to the original bill, concerning the very points that are now being amended, that I should say a few words. I am very pleased to see that the Legion has returned to the democratic process, where control of the organization in matters such as are contained in the amendment go back again to the rank and file of the membership.


Mr. G. A. Cruickshank (Fraser Valley):: Mr. Speaker, I wish to say-


Some hon. Members:: Question.


George Alexander Cruickshank: Hon. members do not need to worry, because we will have plenty of time to put through this important bill. If some of my friends were as interested in the organization as I am, they would not be calling "question". There are six branches of the Legion in my riding, and one of the badges of which I am most proud is the gold badge of a life member of the Legion. There
The Canadian Legion
is one group that has not been mentioned in connection with the Legion which I should like to mention, and that is the ladies auxiliary. The Legion, like any other organization, could not function if it did not have the ladies behind it. Fortunately we have within that organization the pick of the women in Canada. These six branches in the Fraser valley function very well.
I do not think enough attention has been paid to what the Legion does on behalf of the dependents of veterans. In the first place, irrespective of what government had been in power since the first great war, we would not have secured the pension and advantages to the widows and their dependents, or the suitable disability pension that we have, if it had not been for the influence of the Canadian Legion. Since coming to this house I have had the privilege of sitting on a few committees on veterans affairs. The other day the veterans' widows from the various sections of Canada appeared before the committee to request certain legislation. I hope that, so far as possible, the committee sees fit to make that recommendation when the time comes.
There is one thing I do not want to allow to pass, Mr. Speaker. Mention was made about changing the name of the organization. Probably it was made in an irresponsible moment, because this Canadian Legion has great traditions behind it. It is not merely the Canadian Legion, but is affiliated with the Legions in the rest of the British empire. In so far as my riding is concerned you can change the name to "commonwealth" if you like, but we will continue to be extremely proud of our connection with the British empire. We are going to continue to be proud of it. There has been some discussion before, I think from the same member, when I heard it said that the Legion should go home-I may be wrong in the words, but it was something to this effect-and mind its own business. Mr. Speaker, there are some
400.000	men still left representing some
66.000	men and women who are remembered in this building by the memorial chamber, who do not need any advice along that line, particularly from those who were not qualified to speak on behalf of those who made the supreme sacrifice.
Motion agreed to and bill read the second time.


Mr. Deputy Speaker:: This bill is now
referred to the standing committee on miscellaneous private bills.


David Arnold Croll: Mr. Speaker, is there any
particular reason why this bill should be

The Budget-Mr. Shaw referred to the standing committee? I thought perhaps we could deal with it here tonight.


Mr. Deputy Speaker:: With the unanimous consent of the house.


Some hon. Members:: Agreed.


David Arnold Croll: that the Speaker do now leave the chair for the house to go into committee on Bill No. 190.
Motion agreed to and the house went into committee thereon, Mr. Dion in the chair.
Sections 1 to 4 inclusive agreed to.


[Stage Direction]
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Frederick Davis Shaw: Mr. Speaker, in the very few moments left I hope to conclude my remarks with respect to the Canadian coal mining industry. Prior to six o'clock I expressed the personal fear that the Canadian coal mining industry is in an extremely precarious position. All available evidence points to that fact. This situation has developed substantially as a consequence of several factors, some of which I mentioned this afternoon. First, I lay it to the absence of a national fuel policy, something which is long overdue in Canada. Second, I attribute it to the stiff competition which has developed from natural gas and oil. Now, I may add a third, the failure on our part to have the greatest possible decentralization of secondary industry in Canada. I realize with respect to that latter that it is of far more serious consequence in some parts of Canada than in others. In my own province, as I indicated earlier, we have approximately
10,000	coal miners. They and their families comprise approximately 75,000 people. The collapse of the coal mining industry, or a serious impairment of it, does naturally create a serious problem as far as these people are concerned. However, as I stated this afternoon, I realize fully that in an area such as my own province of Alberta, where industrial
[Mr Croll.]

development is progressing rapidly, there is a greater opportunity for the absorption of many of these workers into other branches of secondary industry. In the maritimes, however, especially in the province of Nova Scotia, as the hon. member for Cape Breton South (Mr. Gillis) indicated, the problem would be more severe as a consequence of, if I understood him correctly, the actual diminution of the secondary industry field in that province.
It would be a national tragedy, Mr. Speaker, if we were to allow this industry to deteriorate when we can prevent that deterioration. We all realize fully that oil and gas development is the most desirable thing. That is progress. I do not want it to be restricted unnecessarily, but I am not unmindful of the fact, as I indicated earlier, that our oil fields, our wells, our refineries, our storage facilities are vulnerable to attack, if attack should occur and heaven forbid that it ever should. But we must be fully conscious of the fact that it can occur.
In the second place, I think that we should never forget that our oil and gas are diminishing assets. We do not know; conceivably thirty, forty, fifty years from now we may not be talking in the same glowing terms of our vast oil and gas production; but if statistics can be believed and if surveys tell the truth-and we think they do-we will have coal reserves here several hundred, if not a few thousand years from the present time. So let us never lose sight of that fact, plus the fact that once the industry is allowed to deteriorate a long, long time will pass before we ever get it back on its feet.
With respect to the national fuel policy, I think it is imperative that we give further consideration to the development of new markets for Canadian coal. There are vast markets within our own nation. I think, too, that such a policy should give consideration to consumption of a greater volume of Canadian coal rather than to continue, as we are continuing now, to consume more and more imported United States coal.
As I said this afternoon, it is all right to talk about United States coal being cleaner and easier to handle; it is all right to talk about its other qualities; but let us not forget that we have no assured supply of coal from the United States. They can clamp down in time of emergency almost overnight, and under those conditions try to start your coal mining industry operating to capacity overnight and see what the results are.
I think that such a policy should give real consideration to the question of freight charges as applied to the movement of coal

from the maritimes and from western Canada to the central markets of this nation.
Just one other point, Mr. Speaker: greater consideration should be given to the various products that can be procured from coal through the process of destructive distillation. It is a well known fact that coal tar can be fractionally distilled to yield certain organic products known as tar crudes which form the starting point for the synthesis of numerous products such as dyes, drugs, explosives, flavourings, preservatives, synthetics, resins, paints and stains. We should also remember that the residual pitch from this fractional distillation is utilized for paving, roofing, waterproofing and insulating. I think we are missing a golden opportunity if we fail at this time to engage in strenuous activity- if that is the proper way to describe it- toward the procurement from coal of the various other fractional products which in turn can be utilized for the production of these many things that I mentioned.
In conclusion, Mr. Speaker, let me emphasize again, as I did when commencing my remarks this afternoon, that I cannot possibly agree with those who assert that we should restrict our gas and oil production because of a presumed adverse effect which it may have upon industry in specific parts of the country. If we drift, as we are drifting at the present time, these fears may well be realized; but if we have a national fuel policy, if for defence purposes, and for economic stability within our country, we concentrate on the decentralization of industry, if we do engage in determination of how we may get specific existing markets, plus a number of other things which I am not going to take time to mention, then we can develop the gas and oil industry, we can develop the St. Lawrence waterways project, and we need not impair any part of this nation. Do it haphazardly, which seems to be the present program, and dire consequences will inevitably result.
(Translation):


Mr. L. D. Creslohl (Cartier):: Mr. Speaker, it gives me great pleasure * and it is also for me an honour to say my first few words in this house in the language spoken by the majority of the people of my province. I do so out of respect for my fellow citizens of the province of Quebec, particularly for those who have elected me as their representative in the parliament of Canada, an honour which I greatly appreciate. I wish to assure them, and the hon. members that I will apply all my energy and such talents as I may possess to the task of serving their best interests.
The Budget-Mr. Crestohl
(Text):
And now, Mr. Speaker, it is not wtihout some trepidation that I rise to speak in this house for the first time. This pulsation flows from my profound awareness of the great responsibility which rests upon every member of this house when he speaks. Such consciousness no doubt alerts every speaker to the exercise of caution, restraint and oftentimes courage, and I am certain that every hon, member of this house has at one time or another-like I am at this moment-been overawed by this great obligation, to the discharge of which we are all dedicated by a fervent desire to apply ourselves to the best of our ability.
May I first of all say to the voters of my constituency that I, Mr. Speaker, am deeply grateful to them for having given me their confidence to represent them in this house, and to speak for them whenever occasion makes it necessary.
Cartier, as hon. members know, is perhaps the most cosmopolitan riding in the country. It could be virtually called "Canada in miniature", as there is no other section in Canada in which there are more languages spoken. Concentrated in this small area, there are ethnic groups from almost every central European country. Many of these include people who are comparatively recent immigrants.
I meet these people often. I speak to them frequently; and it is heartwarming to sense the anxiety they have to integrate themselves completely into the life of our country. The present generation of course still retain some of their native customs and speak their native tongues. But the children, the coming generations, will, as time has already proven to us, live the Canadian way of life in every respect. I bespeak for them the patience and tolerance of their good Canadian neighbours to facilitate for them the necessary fusion which will eliminate obstacles and enable them to become totally adapted as Canadians.
This desire and anxiety was abundantly manifested at a touching ceremony less than one year ago which took place at the Baron Byng high school in my constituency, when some 750 of these new Canadians were admitted to the first steps of Canadian citizenship. Never before in the history of Canada has such a ceremony taken place. The entire assembly was electrified by the deep and respectful solemnity, as the associate chief justice of the province of Quebec himself administered the oath of allegiance. Hundreds were moved to tears with the realization that our country has accepted them and makes of them free men and women. It was indeed a

The Budget-Mr. Crestohl most stirring event and well accredits the government's vision and foresight to stimulate an expanded immigration program.
The United States today is reaping the benefits from its wise immigration policy during the fifty years preceding 1925. In this period it secured an influx of some 30 million people, enabling it to become the most powerful democracy in the world. And today it is even a bulwark for the defence of our own country. We in Canada should profit by that experience. We have the space; we have the natural resources and we have the absorptive capacity. Of all that there is no doubt. But we lack the population to be able fully to expand our wide-open spaces and our limitless natural resources. This view has been most forcefully expressed in the March 9 issue of the United States News and World Report. I quote a digest of this report which appears at page 20, as follows:
"Canada, booming with the United States, is to grow rapidly into the industrial giant of the north.
Oil is a great new industry in Alberta. Canada's aluminum industry already rivals that of the United States. Great hydroelectric projects are planned and industry springs up near cheap power. Iron-ore mining is making great expansion, notably in Labrador. A big future is seen for titanium, a metal lighter than steel, stronger than aluminum, and Canada has the largest known deposits. Production in nickel and cobalt is being stepped up sharply as is lead, zinc, copper, magnesium, gold, silver and asbestos.
Uranium mines of Canada are becoming one major source cf materials for atomic weapons.
Canada's newsprint output is the world's largest. Its lumber of many types for varied uses is moving to all parts of the world.
Factories in Canada are expanding their output and now manufacture automobiles, diesel engines, textiles, electrical equipment and chemicals. New capital is finding its way to Canada. At least one billion dollars of U.S. capital went into Canada.
As Canada becomes a giant in the industrial world, it needs people as well as money.
In 30 years, Canada's population has grown from 8-8 million to 14 million. Immigration, tightly controlled, is being geared to entry of 150.000 European workers, mostly skilled. The shortage is in people."
The government's decision, therefore, to stimulate immigration is a step in the right direction with an eye to Canada's future. I am hopeful that the new program will be effectively implemented. There are some minor bottlenecks which tend to slow the process, but I know that the departmental officials are wrestling with these problems, and I have every confidence that existing obstacles will be speedily eliminated.
An active immigration policy has been urged by all the distinguished members in this house who came from the constituency of Cartier. The late Mr. S. W. Jacobs, who was the first representative of my faith to sit in this parliament, the late Mr. Peter Bercovitch who succeeded him, and the late Mr. Maurice
Hartt who followed, all pressed for increased immigration. They saw how the great flow of immigrants to the United States was making of that country an influential power. They knew that Canada, too, can grow rapidly if we had more people. They made eloquent pleas year after year, and today the intensified development of our natural resources and the present government immigration policy confirm the views which they expressed.
For their foresight and for their courage I pay them my respects and my tribute, and I deem it a privilege now to follow in their footsteps.
One can readily appreciate the reasons for immigrants wishing to settle in Canada. The reputation of our country abroad has been so enhanced that it is almost universally accepted as being the country of the future. Our diplomats have placed Canada on a pedestal in the consideration of those who seek a democratic way of life. Our representatives in the councils of the nations enjoy not only the reputation of being able men but, what is much more important, the reputation of being honest and sincere men.
Never in the history of international affairs have men enjoyed a greater reputation for integrity, sincerity and honesty of purpose than our diplomats enjoy today. On this point I am moved to quote our Minister of National Defence (Mr. Claxton) who, in one phrase on the floor of the house, gave a description of our Prime Minister (Mr. St. Laurent) which more completely than anything else we have ever heard describes his stature.
The minister, during the emergency session last September, referred to the Prime Minister in the most simple language as a man of transparent honesty. How complete and how appropriate a description-"transparent honesty". It is precisely that; and it is this theme of transparent honesty which guides every one of this country's actions, both on the national and on the international scene. The people of this country have sensed- this basic characteristic of our leader. In fact the entire democratic world has sensed it and therefore many [DOT] of the vexing international problems seek solution at the hands of our Prime Minister and his equally conscientious representatives at the United Nations. It is my personal thought, or perhaps it is shared by others, who like myself, have a profound belief in divine guidance, that it was providential circumstances which placed on the shoulders of these men of transparent honesty-of-purpose the mission of successfully solving a two thousand year old historic problem by returning the Jewish people to their biblical country of origin.

I do not want to sound mystical, nor is it within my competence to adequately emulate the hon. member who quite recently referred to himself as being somewhat evangelical, but I do believe that only a country with a leader and: a government, whose sincerity and honesty of purpose transcend all other considerations, merits the distinction of being recorded in history for the achievement which I have just mentioned, which in human grandeur and historic importance can be likened to that of Cyrus, King of Persia, and Sir Arthur James Balfour of Great Britain, who in ancient days and modern times proclaimed the return of the people of Israel to their promised land.
I believe too that it is more than coincidental that this historic act should be the first major achievement-of-conciliation which has acclaimed our Secretary of State for External Affairs (Mr. Pearson) as an effective and impartial mediator whose talents for peacemaking are being sought constantly by the nations of the world. Perhaps international diplomacy has outgrown the age of Machiavelli and is reaching a new level of approach in which cunningness and intrigue will be replaced by a transparent honesty in our quest for a permanent peace, and in which our Prime Minister and our country will be showing the way.
The same lofty reputation is enjoyed by our diplomatic representatives and civil servants. In conversation with many of the harassed people of central Europe that I met on the continent last year, two years ago and three years ago, it was a source of great pride to hear their praise of Canada and the Canadian personnel with whom they had occasion to deal. The humane conduct of our immigration officials and other civil servants in European countries reflects truly the high sense of tolerance, justice and fairness of the country which they represent.
It is therefore my solemn conviction, that because we are now at a peak in our reputation as being a desirable country to which to migrate, and because some immigrants are still available, we should act with the utmost diligence to help populate our country. Hundreds of thousands of excellent immigrants have been anxious to come to Canada since 1933. Many of them made their way to the United States, Australia, South America, South Africa and recently to Israel. A goodly portion came to Canada, thanks to the humane consideration of our government and its immigration officials who dealt most sympathetically with the various representations made by the international refugee organization.
The Budget-Mr. Crestohl
Unfortunately millions were cruelly and wantonly destroyed. Many thousands still want to come to Canada and we should facilitate their arrival. The pool from which to draw immigrants is rapidly running out. We may have already missed our opportunity. That would be sad. Let me quote to you what our Minister of Labour (Mr. Gregg) said on this question when he appeared before the standing committee on immigration and labour on March 8. Speaking about the availability of displaced persons for domestic service, the minister had this to say, as reported on page 22:
"The number of people available for this employment from among the D.P.'s is practically exhausted and we are searching for other sources of supply.
On page 23 he said:
A few minutes ago, I pointed out that the supply of D.P.'s suitable for employment as domestic workers was about exhausted. This is also true in a general way of D.P.'s for other occupations.
He stated further:
With regard to the outlook for 1951, we expect that we will be faced with labour shortages of greater proportion than we have had to deal with during the past few years.
Under the group movement plan, we have placed orders for 16,000 D.P.'s to help meet anticipated labour shortages. The indications at the moment are that we may not be able to get the required number from among the D.P.'s and if this proves to be the case, we will have to look for sources of supply elsewhere.
The leaders of our commercial and industrial futures are deeply concerned about this problem. The Canadian Chamber of Commerce only last week urged the government to adopt an active immigration program. Speaking at a citizens forum in Toronto on March 28, 1951, Mr. W. F. Holding, president of the Canadian Manufacturers Association, did likewise. Both these views were most effectively summarized in an editorial in the Ottawa Citizen of April 10, 1951, as follows:
The Goal of a Doubled Population
"A goal of 30,000,000 Canadians within the next 25 years does not seem so far out of reach today as might have been the case during the depressed 1930's. In urging this target upon the government, the Canadian Chamber of Commerce expresses a realistic faith in Canada's future. It cites the present needs of agriculture and industry for more workers, and the need of greater manpower to defend a vast territory. These needs are likely to increase, for Canada's natural wealth is still largely unused. Even before the rearmament prograrr caused shortages in many labour categories, a high level of employment in the post-war years had confounded pessimists. It is reasonable to assume for the future that Canadians will never again tolerate the kind of laissez-faire slump from which they suffered through a painful decade.
But at the rate of 150,000 immigrants a year, as set by the federal government for 1951, Canada will be a very long time in doubling its population. Present circumstances seem to have outdated this target, and the pace of departmental activity as

The Budget-Mr. Crestohl well. Many potential Canadian citizens are eager to come here. Greater efforts should therefore be made to obtain the co-operation of other governments and to arrange transportation. At this end, reception facilities should be still further improved, and in this connection the individual citizen has a responsibility to help make the newcomers welcome. Though the government has taken steps to speed the inflow of immigrants, its policy is not yet sufficiently ambitious and energetic to satisfy the widespread demand for action."
It is evident that we are rapidly coming to the realization that an effective immigration policy is a sine qua non for the industrial, commercial and defensive future of our country. Implementing it satisfactorily will make of Canada that great democracy that it is destined to be in the future.
It perhaps follows that in looking ahead to a greater Canada, we should examine briefly the human rights enjoyed by the people of this country. The hon. gentlemen of the "other place" performed an act of public service when they created a committee to hear submissions from public and private bodies on the question of human rights and fundamental freedoms. They prepared a report and submitted it on June 21, 1950. In my humble opinion this is an important document which I recommend to the careful attention of every hon, member of this house. Briefly the report declares that the Canadian parliament could adopt the covenant on human rights without invading the provincial legislative authority. The report further briefly states:
A Canadian declaration of human rights could follow in its general lines the preamble of certain of the articles of the United Nations declaration of human rights, subject to the reservations expressed by the Canadian delegation at the United Nations. It would declare the right of everyone in Canada to life, liberty and personal security; the right to equal treatment before the law, to fair trial, to freedom from arbitrary interference with one's privacy, family, home and correspondence; to freedom of movement, to a nationality, to obtain asylum from persecution, to found a family, to own and enjoy property, and to freedom of thought, conscience and religion.
I am therefore of the opinion, Mr. Speaker, that, in view of the rapid growth of our country, now may be the appropriate time to deal with this matter. It well behooves a country such as ours to show the way and take leadership in a matter of such lofty moral and humane importance by adopting such a bill at the earliest opportunity.
I should like, Mr. Speaker, at the same time and on the same level to deal with another phase of human relations. I refer to the genocide treaty. Genocide has been described as an old crime with a new name. It is the old crime of Attila and his Huns. It is the crime of Genghis Khan and his Tartars. It is the crime of Hitler and his

nazis. In a word, it is the unspeakable crime of the massacre of a people.
In our own time and within our own memory we have heard of the Ottoman massacres of Armenians, of the massacre of Christian Assyrians in Iraq, of the Ethiopian massacres by Mussolini, of the Chinese massacres by Japan; of the Jewish massacres by the nazis, and only recently of the massacre of 120,000 Chinese by the communists. These mass murders must be outlawed by international agreement. A genocide pact may be the answer. Such a treaty has been approved within the framework of the United Nations. I do not know whether there has been presented to parliament a resolution calling upon Canada to sign the genocide treaty. I do know, however, that we have not yet signed this treaty.
There is no constitutional issue involved, nor is there a political aspect involved. It has international sanction, and unless there is some special reason for not having done so, I would urge that it suits the stature of our country as a humanitarian nation to associate ourselves with all those others who have already signed the genocide pact, and thus take another step forward in our civilization.
I am impelled, Mr. Speaker, at this point to draw to the attention of the house that a crime against humanity is being committed by a member of the United Nations at this very time and for several weeks past. The savage treatment by the Iraqi government of some 80,000 of its population merits the deep concern of all mankind.
I do not want to describe the heartbreaking details. Suffice it to say that the Baghdad government has recently adopted legislation not unlike some of the Hitler Nuremberg laws. When in 1933 and the years that followed German inhuman legislation and behaviour was drawn to the attention of the democratic nations, interference was withheld on the argument that it was a matter of internal administration. There was no United Nations organization at that time, and there was no jurisprudence by international tribunals on crimes against humanity. Nor was there a genocide treaty at that time. The situation, however, is different today. The Iraqi crimes against humanity, not unlike the German attempt to replace the law of civilization by the law of the jungle, must be stopped. Our country should concern itself not only with this but with every violent breach of human decency.
I am therefore hopeful that our Secretary of State for External Affairs (Mr. Pearson) will reach the appropriate authorities for a

report on the situation and make our country's views known and publicized before it is too late.
I have already, Mr. Speaker, by placing two questions on the order paper, shown deep concern about the release of nazi criminals by the United States authorities. The answers indicate that our government was not consulted since the released prisoners were convicted by American tribunals over which they alone had jurisdiction. That makes the situation no less distressing, and wholly apart from the fact that this action violates the sensibilities and feelings of our great ally, the republic of France, and millions of people throughout the world, I am concerned with this matter and disturbed by it for an additional reason.
These criminals were condemned for war crimes. Their specious defence that they did nothing more than obey orders of superior officers was rejected by the courts. The courts ruled that what they did was a heinous crime, and will be stamped as such for all time, for which they must be punished. The decision to release them tends in my opinion to nullify the great principles enunciated in the judgments, and vitiates important jurisprudence created at such great sacrifice. The distinguished American general in his process of wooing doubtful German support makes an over-generous gesture in returning to the nazis their lives, their freedom and their fortunes, which he might do, but only if the nazis could in turn give back the freedom, the fortunes and the lives of the millions of innocent men, women and children whom they murdered. That and that alone would be a fair quid pro quo under these circumstances.
The man who prosecuted the criminals at Nuremberg makes a very cryptic yet forthright statement on this question, and I quote a report in the Montreal Daily Star of March 29,	1951. The headline is, "Shawcross
Opposed to 'Whitewashing' Nazis." The article reads:
"Sir Hartley Shawcross, attorney general and chief British prosecutor at the Nuremberg war crime trials, said yesterday it would be a mistake to 'whitewash' nazi war criminals because they were opposed to communism."
Under the same heading, Mr. Speaker, falls the problem of rearming Germany. Some of the dangers have already been very poignantly emphasized in this house. I should like to underscore just one feature. History is replete with Teutonic martial activities. In our own lifetime we have seen what Teutons will do with arms. We remember 1870, 1914 and 1939. They had arms but they abused them, to the great sorrow of millions of families throughout the world
The Budget-Mr. Crestohl
And we are now considering placing weapons in their hands once more! What can we expect in 1952, 1953, 1954 and the years that will follow? Already Mr. Krupp is boastfully striding through Germany announcing from the housetops that the Krupp military empire is going back into operation. What an alliance for the democracies to contemplate! To me it is a sad and unholy alliance, fraught with the greatest dangers.
There is no love in German hearts for France, England or America. It is puerile for us to think that the illustrious general can entice or create that love by wooing Germany through offering to strengthen her military and industrial might. I am not unmindful of existing dangers and the need to stop Russia; but is the danger not greater that, at a moment's notice, the Germans, with the utmost glee, will turn our weapons against us? This they would do for one of two reasons. The first would be out of a desire to save their own necks. If they should get the notion that the Russian march through Germany could not be halted they would promptly join the Russian forces and continue the march with them westward against us. The second reason is their insatiable and grim desire for revenge. Revenge against France, revenge against England, and revenge against the United States. Can we risk arming Germany under these circumstances?
There is an even greater danger now that consideration is being given not only to rearming Germany but also to giving her political and industrial freedom. This danger was strongly emphasized in an editorial in the Montreal Gazette as recently as April 5, 1951. For want of time I quote only extracts from that editorial, but I urge that it be read in full by all hon. members. The headline is "Where will Germany sell?", and the editorial goes on:
"The announcement has been made at Bonn that the production of West German industry is to be greatly broadened . . .
All this would seem a natural and desirable development, were it not for the disturbing question:	Where is West Germany to sell its industrial
products? The fact is that a very considerable proportion of West German production has been passing eastward into the communist realm. It is estimated that the value of these exports eastward now amounts to $230 million a year. And since the lifting of the Berlin blockade, at least 150,000 tons of steel have gone to East Germany from the Ruhr valley.
. . . The "known" or legal trade is only a small proportion of the total trade . . .
It is said that some of the German industries think that doing business with the Communists is a form of "insurance." If the Communists were ever to seize West Germany, these friendly relations in trade might be accounted to them as a form of economic righteousness. This mentality, strange as

The Budget-Mr. Crestohl it may seem in North America, is perhaps more easily understood among those who feel they are living on the rim of the abyss.
. . . But if a West German republic becomes master of its own affairs, it may see fit to make an economic treaty with Russia or any of her satellites.
. . . And if West Germany should have political freedom to make such a deal, and should have the expanded industrial capacity to fulfil it, the other nations of the Atlantic union might find that a large segment of their economic ramparts against communism had crumbled.
The trade now taking place between West Germany and Communism (even with West Germany's present industrial and political limitations) is sufficiently disturbing to point a warning for the future.
Building West Germany into the Atlantic world is going to be difficult. But allowing West Germany to build an economic pipe line to the east is much too easy a solution. It is solving our own problem by also solving that of the Russians."
These manoeuvres, to liberate the prisoners and to arm Germany, seem prompted by nothing more than military exigencies, the real value of which is still in grave doubt. And for these doubtful and uncertain advantages the United States military authorities appear to overlook important legal principles and considerations of great moral value.
Daniel O'Connell, the illustrious Irish parliamentarian, many years ago appropriately epigrammed this type of action when he declared, and I repeat with all the emphasis at my command:
"Nothing is politically or diplomatically right if it is morally wrong."
-and Mr. Speaker, in my humble opinion these moves are morally wrong! And the voice of this parliament should be raised in protest against anything that is so morally wrong.
Since a permanent peace is our objective, let us bear well in mind the words of the eminent philosopher, Ralph Waldo Emerson, who declared:
"Nothing can bring peace more quickly than the triumph of principles."
The corollary of that is that peace will .tever endure if won through the sacrifice of principles. This view was very clearly stated by Senator William Fulbright in an address to the United States Senate on April 9, 1951, which is reported at page 42 of Life magazine, which I quote in part. He said:
"The vast majority of great civilizations have been destroyed, not as a result of external aggressions, but as a consequence of domestic corruption. I wonder whether in recent years we have unwittingly come to accept the totalitarian concept, that the end justifies the means, a concept which is fundamentally and completely antagonistic to a true democratic society. Democracy is, I believe, more likely to be destroyed by the perversion of, or abandonment of, its true moral principles than by armed attack from Russia."
It is therefore my prayerful submission, Mr. Speaker, that this house should urge our

military experts not to sacrifice great moral values for doubtful and dangerous military exigencies.
Now, Mr. Speaker, by your indulgence and with your very kind consent, permit me as an eyewitness to inform this house of the great honour which you have yourself, sir, conferred upon our country at the ceremonies during the dedication of the new British House of Commons in London. You will recall, sir, that through fortunate circumstances it was my privilege to be present and witness the various functions at which you were called upon to represent Canada. Hon. members, your hearts would have glowed with the greatest pride to have seen our Mr. Speaker, who from the very first procession to the final function, not only by his natural height and the tricornered hat, but by his dignified bearing, his judicious statements and the courtly manner in which he and his charming wife carried themselves, he captivated the admiration and respect of the entire royal and distinguished assemblies.
The final function was a farewell dinner tendered to the commonwealth speakers. The Hon. Senator Roebuck, as chairman of -the executive committee of the commonwealth parliamentary association, presided with great distinction. It was a glorious evening for Canada, as both our Mr. Speaker and the hon. senator shed great lustre on the country which they represented.
As a matter of personal privilege, Mr. Speaker, permit me at this point to express my gratitude to the genial clerk of this house, and to Sir Howard d'Egville, the director of the commonwealth parliamentary association, and his efficient assistants Mr. Spencer-Hess and Major Lockhart as well as to their staffs, both here and in- London, for their gracious attention in making my participation possible at some of these functions in London.
May I also, Mr. Speaker, just say a word about the great emotion which stirred me as I witnessed the opening of the British parliament by His Majesty the King. It was an experience beyond description, and one which I would recommend every member of this house to witness at some time if at all possible.
One saw the great institution of democracy in all its glory, with the dignity and respect for those things in life which we hold sacred.
Having thus been stirred by witnessing the opening of the mother of parliaments, permit me, Mr. Speaker, to tell this house of my unique experience within eight days of also witnessing the opening of the baby of parliaments in the sacred city of Jerusalem. It was my privilege to have been invited by the

speaker of the Israeli Knesset to be present at the opening ceremonies.
This enabled me to reflect upon eight hundred years of parliamentary government, from the oldest parliament in the world in London, the capital of our commonwealth, to the youngest parliament in the world in Jerusalem, the first capital of civilization, which gave the world its greatest precepts for human relations, and its greatest moral teachers, philosophers and prophets of peace; and from whence came forth the prophetic plea of Isaiah, which holds so true even today.
". . . to beat our swords into ploughshares and our knives into pruning forks.
And that nation shall not lift up sword against nation.
Neither shall they learn war any more."
I trust, Mr. Speaker, that hon. members will understand the spirit which moves me to make this reference, and that they will graciously attribute it to the fervour which radiates to anyone who comes in such close proximity to the sacred places and to the very cradle of civilization. Add to this the deep-rooted affection of the people of Israel for anything Canadian, and you will more readily understand the personal gratification I experienced, and the affectionate expressions which greeted me whenever and wherever I was introduced as a Canadian. The gratitude of the people of Israel for our country is a matter of permanent historic record. Their anxiety for every association with Canada and things Canadian is unbounded. It is therefore not surprising to find that Israel's trade with Canada increases daily. In the first ten months of 1950 we exported to that little country Canadian products to the extent of about $12 million. I am sure this trade will continue to grow, as will no doubt also our commercial and diplomatic relations to the mutual advantage of both countries.
In conclusion, Mr. Speaker, permit me to refer to the well-known academic dispute between philosophers and historians who differ as to whether it is the leader that produces the times or whether the times produce the leader. Personally I share the latter view. The times always produce the leaders necessary to cope with the existing problems.
It has also been said that a country has the leaders it deserves. Ours is a great country with a great destiny, dealing with great problems. This calls for a great leader; the times and kind Providence have produced him. Canada deserves him. We are therefore fortunate indeed that the welfare of our country is now in the hands of the present Prime Minister. Therefore, not only we in Canada, but every freedom-loving person in every part of the world should pray constantly for his good health, so that he may
The Budget-Mr. Knowles continue to be endowed with divine guidance in leading the free people of the world in their successful quest for a permanent peace and a democratic way of life, to the great glory of God and all mankind.
Mr. Stanley Knowles (Winnipeg North
Centre): Mr. Speaker, in rising to take part in this budget debate, I shall discuss in the main one aspect of our income tax legislation which, so far as I am aware, has not yet been touched upon since this debate started. I refer to. the question of the amount that taxpayers are allowed to deduct because of medical expenses, and in particular to the fact that there is a floor under that amount of 4 per cent of one's net income.
Having indicated that that is the main subject with which I shall deal, I should like to take just a minute or two before I return to it to make one or two general comments on the budget. The reason I am satisfied to limit myself to a moment or two is due to the fact my views have already been expressed by others who have taken part in this debate. I regret that the incidence of taxation imposed by the changes announced by the Minister of Finance (Mr. Abbott) bears most heavily on those least able to bear it. It has already been pointed out that when one looks at the rates of increase in taxation, the greatest increases have taken place in the field of the various commodity taxes rather, for example, than in the field of corporation taxes.
With regard to corporation income taxes, there is no increase for corporations whose net earnings do not exceed $10,000 per year. For those above that figure, the increase is at the rate of 20 per cent. Similarly, the rate of increase in the personal income tax is 20 per cent across the board. But when it comes to the sales tax, that tax which bears most heavily on those least able to bear it, the increase in the rate, so far as the general sales tax is concerned, is 25 per cent. When one looks at the excise tax, he finds that in some cases there is an increase of 66 2/3 per cent. I am referring to those cases where the rate of 15 per cent is raised by 66 2/3 per cent of that amount to the figure of 25 per cent. Then there is the case of washing machines, mechanical refrigerators and electric stoves, where the increase in the rate is such that it cannot be calculated in percentage terms. It goes up from zero all the way to 15 per cent.
I would point out also, Mr. Speaker, that there is in these proposals a form of double taxation against those who are least able to bear it; for the income tax and these various commodity taxes hit the same people.

The Budget-Mr. Knowles No one denies the need, under present conditions, of increasing the revenues of the country, but it does seem to me that the Minister of Finance might have found a fairer way to impose increased taxes than is the case with the budget that has been presented to us.
I want to say that I support wholeheartedly the protest against the sales tax increase that is involved in the amendment moved by the hon. member for Greenwood (Mr. Macdonnell), and I am also supporting wholeheartedly the amendment moved by my leader, which regrets that the 20 per cent surtax on individuals has been made to apply as low as it has. In our view that tax should not be applied until $1,500 in the case of single persons and $3,000 in the case of married persons.
I indicated, Mr. Speaker, that most of what I have just been saying has been mentioned previously in the course of this debate, so that I do not need to expand on it. I am sure that my own position with respect to these matters is quite clear. Rather, when one comes into a debate after it has been going this long he feels an obligation to deal with some matter that has not previously been dealt with. Therefore I raise the matter I referred to at the outset of my remarks, in the hope that something might yet be done about it this year, or if not this year, another year, namely the limited way in which deductions for medical expenses are allowed.
We all support the idea that there should be some consideration in the income tax to those persons who are hit by heavy medical expenses. There is a notion abroad', however, that the provision in that respect is much more generous than it actually is. The lack of generosity which I allege arises from the fact that the taxpayer is not permitted to take from his net income the total amount of his medical expenses, but rather only that portion of his medical expenses which is in excess of four per cent of his net income.


Mrs. Fairclough:: And under the ceiling.


Stanley Howard Knowles: And, as the hon. member for Hamilton West (Mrs. Fairclough) points out, there is also a ceiling on the total amount that can be deducted. In fact, that will come out in just a moment in what I wish to read from the ordinary income tax form. I am reading from page 3 of the individual tax return for 1950:
You may not deduct your total medical expenses. The amount deductible is only that portion of the expenses over 4 per cent of your net income and may not exceed: single, $750; married, $1,000; dependents, $250 each ($1,000 maximum).


There are some other rules that follow on page 3 of the income tax form which limit the kinds of expenses that are allowed as medical expenses, mainly payments made to hospitals, doctors, nurses and so on. By no stretch of the imagination do the expenses that are allowed as medical expenses cover all the costs that any family incurs when it is faced with a serious illness.
First I want to say that what I have just read from page 3 of the income tax form is of course taken from section 26, paragraph (b) of the Income Tax Act of 1948, which indicates that there may be deducted by the taxpayer an amount equal to that portion of medical expenses in excess of 4 per cent of the taxpayer's income incurred and paid either by the taxpayer or his legal representatives, and so on.
It seemed to me that the best way to look at this matter was to work out some specific examples and see just what help Canadians who are hit by heavy medical expenses obtain on the basis of that provision in the Income Tax Act. Therefore, I have worked out two or three cases. It happens that I have worked them out on the basis of the rates that applied for 1950 and also on the basis of the new rates that apply for 1951 and subsequent years, namely a -20 per cent increase. I have both sets of figures in front of me, but I think to avoid confusion I had better stick to the new 1951 rates.
I took in the first instance a case of a married couple with no children, and with an income of $2,400 a year, and I asked the question: What assistance, what relief from income tax, will that couple get if in a full year on the new rates it is faced with medical bills amounting to $200? I submit that there will be many cases in Canada of amounts of that much having to be paid during 1951 by families of two people with that much income. Well, if that couple, earning $2,400, has no medical expenses during 1951 and no other deductions allowed from the $2,400 the tax they will have to pay will be $70.80. But by being permitted to deduct from their net income the amount of their medical bills in excess of 4 per cent of their net income the taxes which they would have to pay will be reduced to $52.80. At first blush it may seem very nice on the part of the income tax authorities; but look at it. It is a reduction, a tax relief, of only $18 to a couple who have been faced with $200 of medical expenses out of an income of $2,400 in the year 1951.
On the other hand, Mr. Speaker, may I point out that if that same couple chooses, not involuntarily as is the case with medical expenses, but voluntarily, to give to churches,

charities and so on, of one sort and another, provided that they are approved by the department, the same amount of $200, when that couple comes to file its income return it will get an allowance not just of the portion of that $200 above 4 per cent of the net income, but the whole $200. The result is that they will pay only $34.80 in income tax; in other words, the saving in that case will be $36.
Let me put these two savings before you again, side by side. A couple earning $2,400, having $200 medical expenses in 1951, will get income tax relief against that $200 of $18. If the same couple, not having had medical expenses, gives away $200 to approved charities, they will receive income tax relief of $36.
I am not complaining about the latter, but it does seem to me that the former, namely, medical expenses, should be on the same basis. After all, when we make donations to whatever charities, organizations or churches in which we may be interested, we do it of our own free will. And while it is very popular when some organizations are soliciting donations to point out that there will be income tax allowance for those donations, still I think we should not expect the government to help us out too much with freewill donations we choose voluntarily to make.
Medical expenses are in a totally different category. They are involuntary; they are forced upon us by conditions beyond our control. And I submit the least the government should do is to put medical expenses in the same category as charitable donations. I may point out that when this commendable provision allowing some consideration for medical expenses was first written into the income tax law, when Mr. Ilsley was minister of finance, the original figure was five per cent. Some of us made speeches in those days, like the one I am making tonight; and eventually Mr. Ilsley met us 20 per cent of the way. He reduced that 5 per cent figure down to 4 per cent, and that was a welcome change. But I submit the time has come to wipe out that 4 per cent floor altogether, and to allow the total amount of medical expenses, in the same way that the total amount of charitable donations is allowed.
Perhaps I should put on the record, in case the parliamentary assistant to the Minister of Finance is following me, the fact that there is a ceiling on the amount that can be charged for charitable donations-and I think it is right that that ceiling should be there. I do not think a similar ceiling should be placed on medical expenses, again for the reason that they are involuntary, and
The Budget-Mr. Knowles that the whole idea of the allowance, when it was first introduced, was that consideration should be given to people who have these exceptionally heavy medical expenses during the course of a year.
Let me take another example, the case of a family earning $3,600 a year, a man and wife and two children. Let us assume that in 1951 such a family is faced with medical expenses amounting to $300-and there will be many families with incomes smaller than that faced with medical expenses equal to that amount, or greater, in 1951. If such a family had no medical expenses their tax on $3,600, at the new rate, would be $240. The right to deduct the amount of their medical expenses in excess of the 4 per cent figure would reduce the $240 tax to $210. In other words, the law as it stands will permit them tax relief of $30 against medical bills of $300. Mr. Speaker, that is not good enough in a day and age when the country is crying for health insurance. It is not good enough to help our people to that very limited extent.
I have here the figures worked out to show what would happen if the same family were to give away $300. In that instance the amount of tax payable would be only $178.80. In other words there would be tax relief of $61.20. Again, let me put the two figures side by side. A family having an income of $3,600-a man, his wife and two children- with $300 medical expenses in 1951, will have a tax allowance of $30 against that $300. The same family giving away $300 would have a tax allowance more than twice the amount of the medical allowance, or an amount of $61.20.
I say the least the government should do is to put the two kinds of expenses on the same level, or in other words allow the whole of one's medical expenses as a deduction from net income before the tax is computed.
I want to give one more example. This time I have taken the case of a man and wife with two children. The income in this instance is $3,600 a year, and the medical expenses amount to $500. Their tax for a full year at the new rates, if they had no such medical bills, would be $240. By taking the deduction above the 4 per cent figure that amount would be reduced to $170.40. In other words there is a saving of $69.60. But if that same family were allowed to deduct the full $500 they would save a total of $97.20. That is little enough to help out with $500 in medical bills, but $97.20 is better than $69.60.
Let me go back over those cases and point out what happens, as so often is the case, when these families are unable to pay the whole of their medical bills within the twelve-month period. We know how many
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The Budget-Mr. Knowles times that happens. First, let us take the couple with the income of $2,400 and with medical bills of $200 incurred during the year, and suppose that it is impossible to pay off those bills in one year; in those circumstances if the couple pays $100 in one year and $100 in the next, by the time one does the calculating he finds they do not get any tax relief at all.
The same is true of the family drawing $3,600 in salary-a man and wife and two children-and having medical bills to the extent of $300 during the year. If they are able to pay them off in two years, paying $150 the first year and the same amount in the second, by the time the calculations are made we find they get no tax relief at all in lieu of their $300 medical expenses.
Then, with regard to the $3,600 family having medical bills of $500 in the year, and paying $250 in each of two years, we find they would have only $14 in each of those years, or a total of only $28 in tax relief, against a total medical outlay of $500.
I submit that those figures tell the story of how little the present provision means, and that it is time for the kind of consideration Mr. Ilsley gave to our representations years ago, which led him to reduce that 5 per cent down to 4 per cent. It is time for further consideration of this matter-only this time let the government wipe out the 4 per cent floor altogether, and allow the whole of one's medical expenses against net income.
As I said earlier in my remarks, the items allowed as medical expenses do not cover all the costs a family incurs when it runs into illness. The law allows the doctor's bill, the dentist's bill, the hospital bill and the nurses' bills. I am glad to say that in the budget this year allowance is being made for a limited list of drugs. But there are many other drugs that are necessary and are prescribed by physicians that cost people many dollars per year, but which are not included as an exemption. When there is illness quite often extra help is required in the home, the food bill goes up, and in many cases time is lost by the wage earner. These things are not allowed as medical expenses, yet in many cases they equal or exceed the actual amount allowed by the terms of the income tax law.
I recognize the difficulty in defining medical expenses to include these other items, but because of that difficulty I think the government should go the whole way so far as these allowable expenses are concerned and see to it that the 4 per cent floor is wiped out altogether. I make no bones about it; I think the government should go further than that.
I think that the amount of medical expenses incurred by a family, so long as you define 

medical expenses in the narrow terms set out in the law, should be allowed, not just as a deduction from the net income before the tax is computed, but as a deduction from the amount of the tax itself.
I go back to the family at $3,600, the man, wife and two children, with $300 medical expenses during the course of the year. If there was no illness their tax would be $240. What is the matter with wiping out the whole $240 in order to help that family with its $300 medical expenses during the year? I submit that that is living up to the spirit that led the government in the first instance to bring in the provision about which I am now talking.
We have talked for many years in this country about health insurance. In a few moments, when I associate this question with another question, I shall pile evidence up on my desk to indicate the amount of consideration that has been given to that question and to certain other questions. Despite all the talk, despite all the documents that grace the shelves of this building, we still do not have health insurance. We still have no real assistance for our people when they are faced with heavy medical bills. I want health insurance to be brought in. I regret the negative answer the Minister of National Health and Welfare (Mr. Martin) gave me earlier in this session when I suggested that there be set up a committee to go into this matter, comparable to the committee that dealt with old age pensions last year. For my part I intend to continue pressing for that action.
Until such time as that action is taken I say that the least this government can do is to show its concern for the financial problems created by the health of our people and to make one or other of the more generous arrangements I have suggested with respect to allowances against income tax for medical expenses. My first suggestion is that the least they should do is to put medical expenses on the same basis as charitable donations. My other proposal, which I favour more strongly, is that the total amount of medical expenses should be allowed as a deduction, not from the net income before the tax is computed but from the actual tax itself.
It is well known to the people of this country and to the people of the entire world that health is a precious asset. Ill health, sickness and operations of one sort or another hit a large percentage of our people, and the bills that go with them become millstones around the necks of far too many. Surely it is part of the functioning of democracy, surely it is part of the business of

our government to deal with the problems of our people and to try to solve in some way this question of medical expenses. It calls for far more than I am asking for tonight; it calls for a well-rounded program of health insurance as part of an over-all program of social security. May it come soon, but in the meantime, and since we have the kind of government that takes time to do these things, surely what I am asking for now is the least that can be done. I urge consideration of these points by the Minister of Finance and the government with the least possible delay.
I said that I had some evidence here that I wanted to pile up on the desk. I held it back because I wanted to present it with respect to two matters. I have had a bit to say just now about health insurance and the discussing of this question that has taken place in this country for many years. The same thing has been going on with respect to old age pensions. I know that there is abroad in the country today a feeling that we have just about reached the goal with respect to old age pensions. Far from it! There is a notion that it is just a matter of weeks or months until the recommendations of the parliamentary committee on old age security which sat last year will be implemented and then all will be well.
Well, there are two questions about that that bother me. The first is: When is it going to be done? We have the promise of the Prime Minister (Mr. St. Laurent) that there will be no unnecessary delay. We have the assurance of the Minister of Justice (Mr. Garson) that there is no act of omission on the part of the government that is causing delay. But still there is delay. Still the people are wondering when the means test is going to be removed at age 70 and when there is going to be a pension at age 65.
There is the old question about consultation with the provinces and we have these letters, telegrams, perhaps telephone calls and all the rest of it. We have had that sort of thing for a long time. One thing I am wondering about just now is what this increase in the sales tax announced by the federal government will do to the thinking of those few provinces that want a provincial sales tax along with a new old age pensions program.
Frankly I am sorry that the federal government ever let that concept of a provincial sales tax get associated with the new old age pension plan. The committee of last year was asked by certain witnesses to consider a sales tax as a means of financing old age pensions, but the committee rejected it out 80709-137
The Budget-Mr. Knowles and out. The committee made other suggestions as to ways in which old age pensions might be financed, but no sales tax or turnover tax was acceptable to the committee. I deplore the fact that that idea is now being thought of at all and that the constitutional amendment to make possible old age pensions such as the committee recommended last year and the constitutional amendment with respect to a provincial sales tax are being associated together. They do not go together at all. The one does not depend on the other.
My fear is that now the federal government has increased its sales tax some of the provinces are going to say that there has been a breaking of faith in that matter and we may have the whole thing in a mess once more. The federal government will blame the provinces and vice versa. That has happened before about matters that were of dominion-provincial concern. I say to this government that if it uses the difficulties of dealing with the provinces or any other excuse for delaying much longer the implementation of the recommendations of the committee of last year it will incur the intense disfavour, the unending criticism-perhaps I should use stronger words than that-of the people of this country from coast to coast.
If there is one thing that the people of Canada know that this government promised, that this government said it would do something about, it was old age pensions. I tell this government that if it even leaves it to the eve of the next election it will find that the people of Canada will give them a severe rebuke. The time for action on old age pensions is now, not next year when many of the people affected will no longer be alive. It should be done now when they really need it.
My other concern about the recommendations of the committee is with respect to the $40 figure. It was unfortunate that the committee did not see fit last June to make a recommendation with respect to that phase of the matter, but look what has happened since then to the cost of living. The result is that $40, which is still the maximum federally for our old age pensions, is worth only $22.25 in terms of 1935-39 dollar values. Therefore it seems to me, Mr. Speaker, that the time has come not only for the removal of the means test at age seventy, not only for the lowering of the age to sixty-five, but for increasing the amount of the pension, and I urge that consideration be given to that by the government.
I am sure there are some hon. members opposite who wonder why I keep on making speeches about old age pensions, particularly
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The Budget-Mr. Knowles after the partial but significant victory we won in the committee of last year. Why do we not sit back and wait for the thing to happen? Here is why, Mr. Speaker. I have piled up here in my deskmate's seat, and I will now pile them up on top of the desk, some of the documents that indicate the attention and thought that have been given to the two subjects about which I have been talking tonight most of all, health insurance and old age pensions. The documents I have go back only a decade. That is the length of time I have been around these parliament buildings.
First of all, a decade ago there was the Sirois report, three volumes, very significant, and the result of this report was to be the remaking of the Canadian constitutional and financial set-up. Included in the Sirois report are discussions and recommendations about a better basis for old age pensions, and about health insurance. I can remember in my younger days, when I sent a dollar to the king's printer to get these books and read these sections, I thought it would not be long until we would be approaching the millennium. I do not suppose very many hon. members of the house even have copies of this set of books. In fact they are out of print now. You cannot get them, but there they are. Away back in 1940 there were recommendations with respect to old age pensions and health insurance.
Of course the matter was not allowed to die right away. In 1943 there was set up in this house a special committee on social security. I well remember the debate on the motion to set up the committee. I was still a young member of parliament, and again I was enthused that there was a proposal to go into this whole question. I was enthused by the nature of the debate. There seemed to be interest on all sides of the house-and this was in the middle of the war, if you please, when we were hoping for a brave new world-in doing something about the important question of social security. The committee met, and there are its minutes of proceedings and1 evidence starting at March 16, 1943 and running through until July 21 of that year.
That committee did not only do its own thinking and discussing of the matter. It was furnished with some useful information. To begin with, it had before it this document prepared for the special committee on social security, entitled health insurance report of the advisory committee on health insurance appointed by order in council P.C. 836 dated February 5, 1942. There it is, a fine big book over two inches thick, which is an excellent treatise on the whole question of health insurance. I well remember when it first


came out. To me it was so valuable a document that I tried to get a number of copies of it to send to people interested in the question of health insurance, and it was difficult to do so. When one sent to the distribution office one was told that they did not have very many copies, and it was pretty hard to get even one at a time. I remember that a year later word came from the distribution office that they had a large supply of this book downstairs, and would members please send for them and help get rid of them. They were cluttering up the shelves in the distribution office. I think I got twenty or twenty-five just as easily as that. Interest had been lost in this particular document, but there it was in 1942 and 1943 for the benefit of that committee.
In addition, the social security committee had laid before it the Marsh report, a report on social security for Canada prepared by Dr. L. C. Marsh for the advisory committee on reconstruction. That was another committee. I did not bring their minutes down here, but the Marsh report was also laid before the special committee on social security. I was glad to hear Canadians being reminded of this report last Sunday night on the C.B.C. by Dr. Marsh himself, and I believe he is to speak again next Sunday night. He is reviewing the extent to which some progress may have been made since the days of that report. It was an over-all comprehensive report dealing in the main with these two important questions of old age pensions and health insurance.
What came next? The next important date was Saturday, July 29, 1944, when there was tabled in the House of Commons by the then minister of pensions and national health, the late Ian Mackenzie, a draft bill on health insurance. It is a document half an inch thick and it forms a part of the official records of the house. It is included in the Journals of the House of Commons for 194445. It is difficult to locate a copy of the bill itself today but there it is, in the Journals- a draft bill, which some of us thought meant that there would be action at the next session; but nothing was ever done about that draft bill.
I move on. In 1945 we had an election, and after the election we had a dominion-provincial conference. There was laid before that conference these green books including in particular a document on health, welfare and labour, and another containing the dominion government's proposals to the provinces. As hon. members will recall, two of the main items in those proposals were national old age pensions and a program of health insurance. We have not only these books which

constitute the documents laid before the conference but we also have this book an inch and a half thick which is a summary of the discussions at the conference at which two of the main questions were those to which I am referring, health insurance and old age pensions.
I move on. I point out, Mr. Speaker, that if I had also taken the trouble to collect and bring down every volume of Hansard in which these questions have been discussed this pile would be too high for me to handle. Therefore I have left out all the Hansards containing discussions of these matters in the House of Commons. I now jump all the way from 1945 right down to 1950, and I lay on the pile next the minutes of proceedings and evidence of last year's special committee of both houses of parliament on old age security. We had some discussion of health insurance in that committee as well but that was beyond our terms of reference. Therefore our recommendations related only to old age pensions. We recommended in the main that the means test be removed as at age seventy, and that the pension as at age seventy be paid 100 per cent by the federal government. In addition, we recommended that there be inaugurated a pension at sixty-five to run from sixty-five to sixty-nine and to be paid fifty-fifty by the provinces and the dominion.
I want to say that it was an excellent committee. I remember with a great deal of pleasure the experience of being a member of it. We did a good job, an exhaustive job, and we educated a great many people.


Mr. Laing:: A good committee.


Stanley Howard Knowles: The hon. member for Vancouver South (Mr. Laing) is interjecting, and he is perfectly right, it was a good committee, did a good job, and produced a report, a blue book. I put it on top of the pile. My only hope, Mr. Speaker, is that this pile of books is not an altar that is going to be consumed by fire; I don't want that to happen to this blue book.


Mr. McCann.:: Why don't you get on top?


Stanley Howard Knowles: We thought that was the end of talking about these things, that we were going to get action. Well, that book does not remain the topmost one on the pile; I have to put on at least two more. I now add the proceedings of the constitutional conference between the federal and provincial governments which took place at Quebec, September 25-28, 1950, and then the proceedings of the conference of federal and provincial governments at Ottawa, December 4-7, 1950. There it is; quite a pile.
80709-137J
The Budget-Mr. Knowles


James Joseph McCann: Put the public accounts on top of it.


Stanley Howard Knowles: Well, I do not doubt that they might have talked about these matters in the public accounts committee, but I have been conservative in this matter. I have limited myself to documents reporting proceedings that have borne directly upon these two questions, and in this whole pile I have not included a single Hansard.


James Joseph McCann: Have you read them all?


Stanley Howard Knowles: I am not yet forty-three years old; there has not been time.


James Joseph McCann: What good are they, then?


Stanley Howard Knowles: I for one know what is in these books right from the bottom to the top. That is a fine array, is it not, showing the thought and work that have been put into these matters. And what have we got? We do not have health insurance, though it starts in the bottom book and works right up to the top. What have we in terms of old age pensions? People around me are saying we have Liberal promises, but they are worth nothing. When the book at the bottom of the pile was printed the old age pension in this country was $20 a month at age 70 with a means test as long as your arm. What is it today? It is $40 in 1951 currency but it is worth only $22.25 in 1935-39 dollars, still payable at age 70, with a means test still as long # as your arm. I submit that we have had1 enough of this kind of thing and tjiat the time has come for action.


Mr. McCusker:: I suggest that there is an extra means test imposed by the C.C.F. government in Saskatchewan.


Mr. Blackmore:: That was a wonderful
contribution.


Stanley Howard Knowles: It is possible to discuss that if the hon. member wishes. He knows that the means test which applies in Saskatchewan is the means test determined by federal legislation which fixes a ceiling of $50 on a single person and $90 on a married couple.


Emmett Andrew McCusker: I would correct the hon. member on that. The provincial government makes an extra contribution towards the old age pension and imposes a means test.


Stanley Howard Knowles: The hon. member is completely wrong. The provincial government makes an extra contribution within the $50 for single persons and $90 for married couples provided by federal legislation. If the hon. member for Regina City (Mr. McCusker) is so scandalized by a means test, I suggest he should do something to remove it from the federal legislation. Let us get

The Budget-Mr. Knowles rid of it not next year, not the year of an election, not ten years from now but right now, when it will mean something to our people, particularly in view of the present high cost of living.
If hon. members do not remember what I have said tonight, Mr. Speaker, I hope they will remember this pile of documents, at least two feet if not thirty inches high, showing the attention and thought that have been given this matter by many members of parliament and others who have worked hard. I say it is a crime that all we have got-


Arthur Laing: There is not much wrong with the three volumes on top.


Stanley Howard Knowles: No; the third from the top
is the blue book with which the hon. member for Vancouver South (Mr. Laing) and I had a fair amount to do, and it is a good book. There is not much wrong with the other two, but we still do not have a proper old age pension.


Arthur Laing: You know the reason.


Stanley Howard Knowles: Yes, I know the reason;
but it is not going to be satisfactory to me or to the old age pensioners to still know the reason a year from now, two years from now or ten years from now. It is not the reason for delay we want, or the excuse; it is the implementation of what is in those books, on the statute books of this country.


Arthur Laing: That is what the government
wants too.


Stanley Howard Knowles: Then let them do it, and let them do it now.
On motion of Mr. Weir the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull) moved: the adjournment of the house.
He said: Tomorrow we will continue this debate.
Motion agreed to and the house adjourned at 10.45 p.m.

Wednesday, April 18, 1951